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PEEFACE. 



Kecent events have shown the importance of a 
general diffusion of a knowledge of the first princi- 
ples of finance and of all industrial pursuits. This 
knowledge will never become generally diffused ex- 
cept through the agency of public schools. A portion 
of the time now spent on higher arithmetic and tech- 
nical grammar, would, if devoted to the facts and 
principles of Political Economy, do much toward 
preparing the youth of our land for an intelligent per- 
formance of their duties as citizens. 

In preparing the work for advanced classes in our 
public schools, the writer has aimed to present sim- 
ple elementary truths connected with the business ac- 
tivities of life. These truths will guide the subsequent 
thinking of those who apprehend them. 

Questions have been added to each chapter ; but 
not for the purpose of enabling the pupil to make 
mechanical recitations. The questions cannot be 
answered by words selected from the text. They re- 
quire the study of the text. 



CONTENTS. 



CHAPTER. PAGE. 

I.— Items of Wealth.— Origin of Wealth.— Original 

Measure of Value 7 

n. —Exchangeable Value.— Fluctuation 10 

in.— Different Kinds of Industry 14 

rV.— Conditions of Industry 19 

v.— Increased Productiveness of Industry 23 

VI.— Effects of Labor-Saving Machines 27 

VII.— Division of Labor 32 

VIII.— Mental and Professional Labor 37 

IX.— Territorial Division of Labor 41 

X. — Restrictions on Industry 46 

XL— Capital and Labor 51 

XIL-Wages 55 

XIII.— Morality and National Prosperity 61 

XIV.— Money 66 

XV.— Money continued 71 

XVL— Coinage 75 

XVIL— Value of Gold and Silver 79 

XVni.— A double Standard. -Exportation 84 

XIX.— Paper Money, so-called 90 

XX.— Advantages of a Paper Currency 94 

XXL— Disadvantages of a Paper Currency 102 

XXIL— Banks of Deposit and Loan 107 

XXIII.— Interest 113 

XXrV.— Usury Laws 118 

XXV.— The Credit System 123 

XXVI.— Rent 128 

XXVII.-Taxes 132 

XXVin.— Government Expenditure 136 

XXIX.— Stocks 141 

XXX.— Bills of Exchange 145 

XXXL— Commerce.— Balance of Trade 149 



CHAPTER I. 

ITEMS OF WEALTH. ORIGIN OF WEALTH. THE 

ORiaiNAL MEASURE OF VALUE. 

The desire of possession is one of our earliest 
desires. The child desires to have something 
for its own. This desire becomes in man the 
desire of property — of wealth. 

Items of wealth. — The items of wealth are very 
nmnerous. Land, houses, furniture, clothing, 
carriages, watches, money, fruit, cattle — these 
and a great many other things constitute the 
wealth or riches of a country. 

Two things common. — Two things are common 
to all these articles : 1. They are adapted to 
gratify some desire ; 2. They can be appropri- 
ated — that is, can be owned by some person or 
persons. All articles adapted to gratify desire 
and capable of appropriation come under the 
head of wealth. 

Air and sunlight. — Some objects of desire do 
not come under the head of wealth. Air is very 
desirable. All want it, and cannot live without 
it ; but it is not an item of wealth. It cannot 
be appropriated — cannot become private prop- 
erty. This is owing to its abundance. 

Water. — The remarks which apply to air and 
sunlight apply, for the most part, to water. 



8 POLITICAL ECONOMY. 

i 
Sometimes, however, water becomes in certain 
places so scarce that it can be appropriated. 
Then it becomes an item of wealth, and is 
bought and sold. 

Origin of wealth. — A house is an item of 
wealth ; where did it come from ? 

The trees grew in the forest. The laborer cut 
down the trees and took them to the saw-mill. 
The sawyer sawed them into timber and boards. 
The carpenter fashioned the timber and boards 
into a house. The house is the result of labor 
employed on materials furnished by nature. 

An axe. — An axe is an item of wealth. The 
miner dug the ore from the earth, and made it 
into iron and steel ; the blacksmith hammered it 
into shape and tempered it. The axe is the re- 
sult of labor employed on materials furnished by 
nature. 

A salmon-trout. — You purchase a salmon-trout 
for a dollar. The fisherman caught it in the 
lake. When caught, it was his property — an 
item of wealth. It was the result of labor em- 
ployed on materials furnished by nature. 

What is true of these items is true of all 
items of wealth. Wealth is the result of labor 
employed on materials furnished by nature. 

J^irst measure of value. — All items of wealth 
have value. What is the original measure of 
value ? 

Suppose two men are without food in the 
wilderness. They go in search of food. One 
catches four quail, and the other four trout. If 
they exchange, a quail will be given for a trout. 



ITEMS OF WEALTH. 9 

The quail cost the one about as much labor as the 
trout cost the other. There is something like an 
equal exchange of labor. Labor is thus the first 
measure of value. 

Questions. 

1. "What is said of the desire of possession ? 

2. What are some of the items of wealth mentioned ? 

3. Name some items which are not mentioned. 

4. What two things aria common to them all ? 

5. What is said of air and sunlight ? 

6. What is said of water ? 

7. What is said about the origin of a house ? 

8. What is said of the axe ? 

9. What is said of the salmon-trout ? 
10. Of what is all wealth the result ? 

It. What is the first or original measure of value ? 
13. Illustrate that truth. 



CHAPTER II. 

EXCHANGEABLE VALUE. FLUCTUATION'. 

All items of wealth have excliangeable value. 
On what does the exchangeable value of an article 
depend ? 

A coat. — Take, for example, a coat. Suppose 
the cloth costs ten dollars, and the labor of mak- 
ing it five dollars. The cost of the coat will be 
fifteen dollars. The tailor cannot afford to sell 
it under cost. The market or exchangeable value 
of the coat will not be less than fifteen dollars. 

Cost of production. — From this example we 
see that the cost of production is the cost of the 
material of which the article is made, and the 
cost of the labor employed in making it. As no 
one can afford to produce articles and sell them 
under cost, the cost of production is an impor- 
tant element of value. 

Suj^ply and dema.nd. — Suppose there are one 
hundred coats in the market, and one hundred 
persons who wish to buy coats and who have the 
money to pay for them. Coats will command a 
certain price — say fifteen dollars each. 

Suppose there are one hundred coats in market, 
and two hundred persons who wish to buy coats. 
Coats will now command a higher price. As 
there are not coats enough for all, there will be 



EXCHANGEABLE VALUE. 11 

competition among tlie buyers. The price of 
coats will rise. 

Suppose there are one hundred coats in market, 
and fifty persons who wish to buy coats. There 
will now be a competition among sellers. The 
price of coats will fall. 

Conclusion. — The exchangeable value of an ar- 
ticle depends upon the cost of production, and 
the supply compared with the demand. 

Incorrect views. — Some persons think that the 
value of an article depends solely on the cost of 
production. Others think that the value of ah 
article depends solely upon the supply compared 
with the demand, or, as it is commonly expressed, 
upon supply and demand. 

High jyrices. — When the demand for an article 
is great and the supply is limited, the price will 
rise. When an article commands a high price 
in the market, persons will engage in the pro- 
duction of that article. Suppose the cost of 
hats is four dollars, and the demand for hats is 
so great that the price rises to seven dollars. 
Hat-manufacturing will be regarded as profit- 
able. Men will rush into the business. The sup- 
ply of hats will be increased, and the price will 
begin to fall. It may be that so many hats Avill 
be manufactured that some manufacturers will 
be compelled to sell their hats at cost, or even 
below cost. The price of hats may, for a short 
time, be below cost. 

Low j^rices. — The price of an article cannot 
remain below cost of production for any great 
length of time, because the production of the 



12 POLITICAL ECOKOMT. 

article will cease. No one will continue to man- 
ufacture liats and sell them at a loss. The sup- 
ply of hats will be diminished. If the demand 
continues the same, the price of hats will gradu- 
ally rise till they can be made and sold at a 
profit. Then the supply will be increased. Men 
will engage in manufacturing hats. 

Fluctuation. — The prices of nearly all articles 
are subject to fluctuation, after the manner above 
described. They cannot remain for any great 
length of time very high — very much above 
cost ; and they cannot remain for any great 
length of time very low. Between those two 
extremes most articles are subject to more or less 
fluctuation. 

Value and price. — The XqilVH^ value and price 
have been used in this chapter in the same sense. 
Strictly speaking, the price of an article is its ex- 
changeable value reckoned in money. 

Questions. 

1. What is said of all items of wealth ? 

2. What question is asked ? 

3. What supposition is made respecting a coat ? 

4. What will be the market value of tlie coat ? 

5. What is meant by the cost of production ? 

6. What is the first supposition under the head of 
Supiily and Demand f 

7. What effect on price ? 

8. What is the second supposition made ? 

9. What effect on price ? 

10. What is the third supposition made ? 



EXCHANGEABLE VALUE. 13 

11. What effect on price ? 

12. "What conclusion is drawn respecting ex- 
changeable value ? 

13. What two erroneous views are noticed ? 

14. What is the effect of high prices on production ? 

15. To what will increased production lead ? 

16. How low may prices fall ? 

17. What is the effect of low prices on production ? 

18. What is said of the continuance of very high 
and of very low prices ? 

19. What remark respecting value and price ? 

20. What is price? 



CHAPTER III. 

DIFFERENT KINDS OF INDUSTRY. 

All ivealth is the result of industry. The 
different kinds of industry have been classed un- 
der three heads : 

1. Agricultural industry. — The farmer pre- 
pares the soil, and plants the seed, and takes care 
of the growing crop, and harvests it. The grain 
produced is the result of his labor. It is said to 
be the product of human industry. It is really 
the result of human industry combined with the 
productive powers of nature. 

2. Manufacturing industry. — The manufac- 
turer takes cotton from the agricultural laborer, 
and changes it into cloth. The tanner takes the 
skin of an animal, and changes it intole ather. 
The blacksmith takes iron and steel, and makes 
an axe. Cloth, leather, and axes illustrate manu- 
facturing industry. 

3. Commercicd industry. — A merchant buys 
silks in France and broadcloths in England, and 
sells them in New York. He purchases shoes in 
Massachusetts, and sells them in South Carolina. 
His business is to transfer commodities from 
places where they are less wanted to places where 
they are more wanted. He is thus instrumental 
in supplying the wants of men. 



DIFFERENT KH^BS OF INDUSTRY. 17 

asserted that where industry is free, the rate of 
profits in different departments is the same. 
Facts show that this is not the case. 

Mining and fishing. — The miner increases the 
wealth of a country by extracting minerals from 
the earth, and the fisherman, by taking fish from 
the waters. Strictly speaking, mining and fish- 
ing do not come under any of the heads above 
mentioned. Those three departments embrace 
by far the greater portions of human industry. 
There are operations which cannot properly be 
said to belong to any one of them. 



Questions. 

1. Of what is all wealth the result ? 

2. How many kinds of industry are mentioned ? 

3. Explain what is meant by agricultural industry. 

4. Explain manufacturing industry. 

5. Explain commercial industry. 

6. How does the farmer add to the wealth of a 
country ? 

7. How does the manufacturer ? 

8. How does the merchant ? 

9. State the example showing how the merchant 
adds to the wealth of the country. 

10. What is the most profitable industry for a coun- 
try? 

11. What countries should be devoted to agricul- 
ture? 

12. What countries may engage in manufacturing ? 

13. What besides natural facihties is required ? 



18 POLITICAL ECONOMY. 

14. What is said of the commerce of newly-settled 
countries ? 

15. What is said of the rate of profit in different 
kinds of industry ? 

16. What unwarranted assertion is noticed ? 

17. What is said of mining and fishing ? 



CHAPTER IV. 

CONDITIONS OF INDUSTRY. 

As wealth is tlie result of industry, it is proper 
to inquire what are the circumstances most favor- 
able to the exercise of industry. 

A fundamental condition. — Security of prop- 
erty is a fundamental condition of the existence 
of continuous industry. No man will labor if he 
has not a good degree of certainty that he will 
enjoy the fruit of his labor. No one will sow if 
it is probable that others will appropriate the har- 
vest. No one will spend his time and labor in 
producing that which he cannot claim and hold 
as his own. All stimulus to labor is taken away 
when there is no security of property. When a 
man is secure in the enjoyment of his rights, 
when he is allowed to do what he wills with his 
own, he has encouragement to labor. 

Good govermnent. — Where there is no govern- 
ment, there is nothing to restrain men from seiz- 
ing the property of their weaker neighbors. 
Where lawlessness prevails, there are indolence 
and poverty. 

A bad government may unjustly appropriate 
the property of its subjects, tinder such a gov- 
ernment, a man who is known to possess prop- 
erty may be arrested on a false charge, and his 



20 POLITICAL ECOi^OMy. 

property may be confiscated. Hence there is no 
stimulus to industry and enterprise for the accu- 
mulation of wealth. Prosperity invites oppres- 
sion. If a man has wealth, he conceals it lest it 
should be taken from him. Industry is discour- 
aged, and capital lies useless. 

Umvise legislation. — Property can be rendered 
insecure by unwise legislation. So far as indus- 
try is concerned, it makes no difference whether 
insecurity is caused by tyranny or by folly. 
Whatever produces insecurity discourages indus- 
try and enterprise. Without industry and en- 
terprise there is no advancement in wealth. 

The government may not rob its subjects, and 
yet may not furnish due protection to life and 
property. 

It may fail to enact and enforce laws prevent- 
ing fraud. 

It may pass laws which may cause depreciation 
of property. By an uncertain and changing 
course in regard to certain departments of busi- 
ness, it may paralyze industry in regard to those 
departments. 

For example. — Suppose the government enters 
on a course designed to encourage the manufac- 
ture of cotton. Suppose cotton cloth can be im- 
ported cheaper than it can be manufactured. 
No one will build a cotton factory. But let the 
government pass a law forbidding the importation 
of cotton cloth, or laying a heavy tariff on its 
importation, and men will engage in the manufac- 
ture of cotton. Capital will be invested in man- 



C02?"DITI0KS OF INDUSTRY. 21 

ufactures. Factories will be built, and laborers 
employed. 

Now let the government repeal the laws in re- 
gard to foreign cottons, and the capital invested 
in domestic manufactures will be well-nigh value- 
less. 

Suppose governments alter the coin of the 
country, and put one third less gold and silver 
into the coins. They bear the same denomina- 
tions as before, and are a legal tender as before. 
The result will be great loss on the part of mul- 
titudes. Manufacturers and farmers have sold on 
credit ; and if they were paid what they expected 
when they sold their commodities, they would be 
prosperous. But they are paid only two thirds 
of their debts : all profit is lost, and more besides. 
The wisest men can form no plans that will be 
successful, if they are liable to be thwarted by 
the folly of the government. 

Honest and wise legislators. — We see the im- 
portance to the prosperity of a country, of honest 
and wise legislators, judges, and executive offi- 
cers. Governments cannot create wealth ; but 
they can furnish the necessary conditions for the 
production of wealth. 

Freedom of industry. — There will be the most 
labor when men may engage in what kind of la- 
bor they please, provided they do not interfere 
with the rights of others. In former times, 
rulers undertook to direct the employments of 
men. It is now left to the laborer to choose his 
employment as his tastes or his interest may lead 
him. 



22 POLITICAL ECOIfOMY. 

Intelligence. — Intelligence promotes industry 
and renders it more efficient. An ignorant com- 
munity do not know what can be obtained by 
industry, and hence will labor merely to supply 
their pressing wants. This is true of all savage 
tribes. When men know what desirable things 
can be gained by labor, their desires for those 
things will lead them to perform the requisite 
labor. 

Questions. 

1. What question is asked at the beginning of the 
chapter ? 

2. What fundamental condition of industry is 
mentioned ? 

3. Show why security of property is necessary. 

4. Why is a good government necessary ? 

5. What may a bad government do ? 

G. What effect will this have on industry ? 

7. What effects may follow unwise acts of govern- 
ment? 

8. What may the government fail to do ? 

9. What may it do with respect to fraud ? 

10. What effects may follow a changing course on 
the part of the government ? 

11. What illustration is given ? 

12. What illustration is given relating to the coin ? 

13. What kind of rulers are needed ? 

14. Show the effect of freedom of industry. 

15. Show the effect of intelligence. 



CHAPTER V. 

HOW THE PRODUCTIVENESS OF INDUSTRY MAY 
BE INCREASED. 

At the outset, a mari^s hands were the main 
instruments of labor. If he had no other instru- 
ments, he could accomplish very little. With his 
hands he fashions instruments which add greatly 
to the productiveness of his labor. 

Tools and machines. — The gardener can turn 
up the soil with a spade better than with his 
hands. One can perform only the simplest 
kinds of labor with his mere hands. 

As he increases in knowledge and property, he 
devises tools which add greatly to the produc- 
tiveness of his labor. 

Machines. — By degrees he improves his tools 
and makes more complex and efficient ones. 
They are then called machines. A scythe is 
called a tool. A more complicated instrument 
for mowing is called a machine. 

By the use of tools and machines^ the efficiency 
of human industry is greatly increased, and its 
products are greatly multiplied. 

By the use of machinery, there is done every 
day an amount of work which could not be done 
by hundreds of millions of manual laborers. 

Use of animals. — Human industry is rendered 



24 POLITICAL ECOI^OMY. 

more productive by the aid of animals. The 
horse, the ox, the reindeer, the dog, the ele- 
phant, and other animals, have been brought un- 
der the control of man, and have become assist- 
ant laborers. They greatly increase his indus- 
trial power. "With a horse and cultivator, the 
farmer can till ten acres of corn in less time than 
he can till one acre by hand. Animals are em- 
ployed in various departments of industry. 

Poioers of nature. — Man subdues animals and 
makes them do his bidding. He pursues a sim- 
ilar course in respect to the powers of nature. 

Wind. — Wind is used to propel vessels on the 
water. Before the discoveries relating to steam, 
wind was the sole instrument of navigation. By 
human skill it was made to propel vessels in al- 
most every direction except that directly opposite 
its course. 

It was formerly used to propel machinery on 
land, but is now very generally superseded by 
steam. 

Water. — The gravitating power of water is a 
great aid to human industry. It has furnished 
motive-power for thousands of factories of every 
description. 

Of course it can be had only when it is found 
in nature. In places where it exists in abun- 
dance, villages and cities have grown up. Its 
great advantage is its cheapness. It is subject 
to some disadvantages. It does not always exist 
in convenient localities, is not in all cases con- 
stant ; but is affected by drought, and is liable to 
inundation. The runnin<r streams in manufac- 



PKODUCTIVEI^ESS OF mDUSTRY. 25 

tiiring countries do the work of many millions of 
hands. 

Steam. — Steam is the great assistant of human 
industry. It propels vessels on the rivers and the 
ocean, and the locomotive on the railway. It is 
used to give motion to machinery for perform- 
ing the most delicate operation. It is subject 
to fixed and well-known laws, and is therefore 
under control. It is the great industrial agent 
of man. 

Gunpowder, Nitro- glycerine, etc. — The explo- 
sive power of gunpowder is used in war, and has 
rendered war less sanfyuinary. As an aid to la- 
bor, it is used in blasting rocks, and removing 
obstacles which could not well be removed with- 
out its aid, or that of other explosive agents of 
equal power. 

Electricity. — The electric fluid, though not yet 
used as a motive-power in machinery, is man's 
swiftest messenger. The machine which it ope- 
rates stands at the head of all labor-saving ma- 
chines. 

Nature has furnished man with a great many 
efficient helpers. 

Questions. 

1. What are man's original instruments of labor ? 

2. What does he soon furnish himself with ? 

3. What effect on production ? 

4. What is the difference between a tool and a ma- 
chine ? 

5. Mention a tool and a machine. 



26 POLITICAL ECOKOMT. 

6. How much is done by machinery every day ? 

7. What animals are made to labor for man ? 

8. What effects ? 

9. What other power besides that of animals does 
man use ? 

10. What is said about wind ? 

11. What is said about water? 

12. What is said about steam ? 

13. What is said about gunpowder ? 

14. What is said about electricity ? 

15. What has nature given man ? 



CHAPTER YI. 

EFFECTS OF LABOR-SAVING MACHINES. 

Suppose one hundred men are engaged in mak- 
ing brick. A machine is invented which can be 
worked by one man, and which will do the work 
of one hundred men. If the machine is used, 
ninety-nine brickmakers are thrown out of em- 
ployment. This cannot be regarded as a benefit 
to them. 

If it is said, ** Let them seek some other em- 
ployment, ' ' it may be that they cannot find an- 
other employment. 

Effect on price. — If one man, by means of a 
machine, can make in a day as many bricks as 
one hundred men, the cost of making brick is 
lessened. The price of brick will fall. Two 
dollars will buy as many brick now as four or 
five dollars would before the machine was used. 
This will be advantageous to all buyers of brick. 

Machines for making cloth. — Formerly wool 
and cotton and flax were spun and woven by 
hand-power. Now it is done by machinery. 
The introduction of the machines threw many 
spinners and weavers out of employment. Cloth 
has become vastly cheaper. Cotton cloth, which 
once sold for forty or fifty cents a yard, can now 
be bought for ten cents or less. The introduc- 



28 POLITICAL ECOKOMT. 

tion of machinery has been advantageous to all 
buyers of cloth. It was a disadvantage to those 
thrown out of employment. 

Su2')pose the same thing takes place in regard 
to hats, furniture, leather, and all manufactured 
articles. Machinery lessens the cost of their 
production. Goods become cheaper. In pro- 
portion as they become cheaper, the community 
is benefited. 

It is indisputable that since the introduction of 
labor-saving machinery, all manufactured articles 
have become cheaper. 

How this benefits the laborer. — The laborer re- 
ceives for a day's labor more cloth, leather, nails, 
and other manufactured articles which he uses, 
than he received before machinery was used. 

His wages reckoned in money may not be 
higher than they were before the invention of 
machinery, but a day's wages will purchase 
more. The cheapness of articles has in reality 
raised his wages. The introduction of machin- 
ery has raised the wages of every laborer in the 
land. 

Money -loages and real wages. — Suppose a man's 
wages in money are one dollar a day, and that 
he can buy with that dollar five yards of cloth. 
Again, suppose a man's wages in money are fifty 
cents a day, and that with fifty cents he can buy 
six yards of cloth of the same quality. Suppose 
that other commodities can be purchased in like 
manner. When are the man's wages really the 
highest — when he receives one dollar, or when he 
receives fifty cents ? The value of monej wages 



LABOR-SAYIKG MACHINES. 29 

IS as tlieir purchasing power. The laborer works 
for bread and clothes and furniture. He takes 
his pay in money that he may purchase the 
things he wants. He is interested, not in the 
nominal value of his money, but in its purchasing 
power. 

In time of our Revolution, a man was offered 
for an article nine dollars in silver, or one thou- 
sand dollars in " Continental money." He took 
the nine dollars, because he could buy more with 
them. 

Machines increase the demand for labor. — It is 
thought by some that labor-saving machines les- 
sen the demand for labor ; that the interest of 
the laborer requires that machinery should not be 
used. It can be shown that the use of machin- 
ery increases the demand for labor, and hence is 
beneficial to the laborer. In a very poor com- 
munity there will be little or no demand for la- 
bor. Suppose a community of poor men. No 
one can hire a laborer ; for he has nothing to pay 
him. 

Suppose a community in which there are some 
men of property — men who have ten thousand 
dollars each to invest in farming or in manufac- 
turing. They will want a few laborers. There 
will be some demand for labor in that commu- 
nity. 

Suppose a community in which there are a 
number of men with twenty thousand dollars 
each to invest in business. There will be an in- 
creased demand for labor. 



30 POLITICAL ECONOMY. 

In proportion as tlie wealth of a community is 
increased, the demand for labor is increased. 

Machines increase the productiveness of indus- 
try — increase the wealth of a country ; hence 
they increase the demand for labor. 

Immediate effect. — The immediate effect of the 
introduction of labor-saving machinery is to les- 
sen the demand for labor — to throw laborers out 
of employment. That it is an evil cannot be 
denied. 

The ultimate effect. — The ultimate effect of the 
introduction of machinery is to increase the de- 
mand for labor, and to increase the wages of la- 
bor. The ultimate effect more than counter- 
balances the immediate effect, though it will not 
prevent individual cases of hardship. 

Test of experience. — Facts are in harmony with 
the statements made above. The demand for 
labor is found to be the greatest in those countries 
in which machinery is most used, and in the parts 
where machinery is most used. 

Machinery is extensively used in Great Britain, 
and the number of laborers is very great. In 
the manufacturing districts w^here machinery is 
most used, more laborers are employed than else- 
where. 

Questions. 

1. What supposition is made in the first paragraph? 

2. Is the effect of introducing the machine bene- 
ficial to the laborers ? 

3. What is the effect of machinery on the cost of 
production ? 



LABOE-SAYIKG MACHIKES. 31 

4. What the effect of a machine for makmg cloth ? 

5. What effect on the price of cloth ? 

6. What effect on all things made by machinery ? 

7. Show how this benefits the laborer. 

8. By what is the value of wages to be estimated ? 

9. Effect of machines on demand for labor ? 

10. What is the first supposition made ? 

11. The second supposition ? 

12. The third supposition ? 

13. What conclusion is stated ? 

14. What is the immediate effect of the introduc- 
tion of machinery ? 

15. What is the ultimate effect ? 

16. Show that facts correspond with the statement 
last made. 



CHAPTER VII. 

DIVISION OF LABOR. 

The productiveness of industry can be in- 
creased by division of labor. 

Labor is said to be divided, when one man 
gives his whole attention to performing one op- 
eration. When the work to be done comprises 
several operations, more will be accomplished 
when as many laborers are employed as there are 
distinct operations. 

In making pins without the aid of machinery 
there are a number of distinct operations. There 
is drawing out the wire, straightening it, cutting 
it off at the right length, sharpening the point, 
preparing it for the head, making the head, put- 
ting it on, etc. When one man performs the 
successive operations and makes the whole pin, 
he can make about twenty pins in a day. 

Let division of labor be applied, let as many 
men be employed as there are distinct operations, 
let each one perform one operation, and the num- 
ber of pins made will be greatly increased. One 
man performing all the operations can make 
twenty pins in a day. Ten men thus employed 
can make about two hundred pins in a day. 
AVhen each performs only one operation, they can 
make more than forty-eight thousand in a day ! 



DIVISION OF LABOR. 33 

Increase of skill. — When one devotes himself 
to a single operation, he acquires greater skill in 
performing it. This is the chief advantage of 
the division of labor. 

There are some minor advantages. The la- 
borer has to learn to perform but one operation. 
He loses no time in passing from one kind of 
work to another, and in adjusting his tools. 

Leads to invention. — Division of labor has led 
to the invention of labor-saving machines. 
When one's attention is fixed on a single opera- 
tion, he is the more likely to think on the easiest 
way of performing it. If it can be done by a 
machine, he is likely to invent a machine for do- 
ing it. 

Adaptation of strength. — Some operations re- 
quire more strength and skill than others. By 
division of labor, the operations which require 
strength can be given to the strong, and those 
which do not require so much strength can be 
given to the feeble. The work may thus be 
adapted to the capacity of the laborer. 

Division of labor is less applicable to agricul- 
tural than to manufacturing labor. The farmer 
is compelled to perform more operations than 
the manufacturing laborer. The work of the 
former changes with the seasons, while that of 
the latter does not thus change. 

Division of labor can be applied to commercial 
industry. One may be a wholesale dealer, an- 
other a retail dealer. One may deal in coffee, 
another in sugar, another in flour. 



34 POLITICAL ECONOMY. 

It is only in large cities that division of labor 
can be applied to commercial industry. 

New settlements. — In a new settlement there 
cannot be much division of labor. The farmer 
tills his land, shoes his horses, builds his barn ; 
in short, performs almost every kind of labor. 

We have seen that division of labor is a good 
thing. Why cannot it be introduced in the 
new settlement ? 

Because of the small number of inhabitants 
and the limited amount of capital. There are 
not people enough to give constant employment 
to a blacksmith, a carpenter, or a shoemaker. 

The early occupants of a new settlement are 
commonly men of limited means. They are 
obliged to do every kind of work, because they 
are too poor to hire men to work for them. 

Division of labor cannot take place to any 
considerable extent except where the people are 
numerous and capital is somewhat abundant. 
Hence it is employed to its greatest extent in 
large cities and by large capitalists. 

Advantage of the capitalist. — The manufac- 
turer who has capital to avail himself of ma- 
chinery and division of labor to its fullest extent, 
can produce cheaper than the manufacturer whose 
capital is small. 

Disadvantages. — There are some disadvantages 
attending division of labor. It is liable to have 
an unfavorable effect on the health of the laborer. 
He who gives his whole time to one operation 
exercises but one set of muscles. In order to 
good health, all the muscles must be exercised. ^ 



DIVISION OF LABOR. 35 

Independence. — A man who has learned to 
perform but one operation is in a great measure 
helpless if thrown out of employment. This 
renders him too dependent on his employer. 
He may be compelled to submit to injustice 
through fear of starvation. 

Effect on mind. — Constant attention to one 
operation is not favorable to the mental exer- 
cise which is essential to growth. Constant at- 
tention through life to an operation not more 
important than pointing a pin must exert a dwarf- 
ing influence on the mind. 

Limitation desirable. — Even when circum- 
stances favor division of labor, it is not desirable 
that it should always be carried to its fullest ex- 
tent. It is true that more wealth would thereby 
be produced ; but the production of wealth is 
not the chief end of man. Wealth is not to be 
sought at the expense of health and mental 
growth. 

Questions. 

1. When is labor said to be divided ? 

2. State the illustration relating to pins. 

3. How many pins can ten men make in a day 
without division of labor ? 

4. How many with division of labor ? 

5. What is the chief advantage to the laborer, of 
division of labor ? 

6. What minor advantages mentioned ? 

7. To what may division of labor lead ? 

8. Show in what manner. 



36 " POLITICAL ECOKOMY. 

9. Show the advantage of division of labor with 
reference to adaptation. 

10. Why is division of labor less applicable to agri- 
culture than to manufactures ? 

11. Show how division of labor can be applied to 
commercial industry. 

12. In what places can it be thus applied ? 

13. What is said respecting new settlements ? 

14. Why is there so little division of labor in new 
settlements ? 

15. Where is division of labor applied in the great- 
est extent ? 

16. By whom is it thus applied ? 

17. What advantage has the capitalist ? 

18. What effect may division of labor have on 
health? 

19. What effect on the independence of the laborer ? 

20. What effect on mental growth ? 
31. What limitation is desirable ? 



CHAPTER VIII. 

MENTAL AND PROFESSIONAL LABOR. 

Division of labor can be applied to every de- 
partment of mental and professional labor. 

Scientific investigation. — He who attempts to 
master all the sciences, and make discoveries in 
them all, will certainly fail. In every depart- 
ment of human effort, concentration is necessary 
to success. Every one who desires to make an 
eminent success must say with Paul, ' ' This one 
thing I do. ' ' The great discoveries in science 
have been made by men who have devoted them- 
selves to one branch of investigation. 

The medical profession. — The learned profes- 
sions permit division of labor. One member of 
the medical profession devotes himself to dis- 
eases of the eye, another to diseases of the ear, 
another to diseases of the lungs. By concentrat- 
ing his attention on a single disease, one can 
learn more about it than the general practitioner, 
and acquire greater skill in treating it. By this 
division of labor we have oculists, aurists, etc., 
in the medical profession. 

When one is ill, it is desirable to have the best 
medical skill. This is usually found where divi- 
sion of labor is applied. 

The legal profession. — The legal profession has 



38 POLITICAL ECOi^OMY. 

many departments, and, of course, admits of 
division of Jabor. He who gives liis whole 
time to the study and practice of one depart- 
ment of the law will naturally acquire greater 
knowledge and skill than one who practises in 
several departments. Some devote themselves 
to the study of laws relating to real estate and to 
cases connected with those laws. Some devote 
themselves to preparation of cases in their office, 
and others to managing cases in court. In 
general, the greater the division of labor, the 
greater the knowledge and skill acquired. 

Conditions. — Division of labor in these pro- 
fessions requires certain conditions. A lawyer 
in a country village could not devote himself to 
any one branch of law and practice. In order to 
gain a livelihood, he must take all proper cases 
that come to him. 

A lawyer in a large city, where clients are 
numerous, may devote himself to a single 
branch. As he gains reputation, men who have 
business in that branch will seek his services. 
In a large city, they may be numerous enough to 
give him a large and lucrative practice. 

You see why the leading men in the medical 
and legal professions are found in the city. 

Teaching. — Division of labor can be applied 
to teaching. In the old common-school and in 
the earlier academies, one teacher taught all tlife 
branches pursued in the school. Now division 
of labor has a place in all our large schools, and 
especially in our colleges. One man is required 
to teach mathematics, another languages, an- 



MEKTAL AH^B PROFESSIOiq-AL LABOE. 39 

other chemistry. The tendency is at present to 
push division of labor in the Avork of instruction 
as far as possible. 

It is possible to carry division of labor in teach- 
ing, to a much greater extent than it has been 
carried. It does not follow that the pupil would 
be benefited in proportion to the extent reached. 

The business of a teacher is not to communi- 
cate the greatest possible amount of knowledge, 
but to lead the pupil to exercise his mind in the 
right way ; to aid him in forming right mental 
habits. Knowledge sustains, with respect to edu- 
cation, the relation of means to an end. The 
end is mental development and discipline. 

If there are a great number of teachers in a 
school no one will come sufficiently in contact 
with the students to influence them efficiently. 
A school may thus have too many teachers as 
well as too few. 

Questions. 

1. Show how division of labor may be applied to 
scientific investigation. 

2. What will be the result of such application ? 

3. Show how it can be applied in the medical pro- 
fession. 

4. What results will follow ? 

5. Show how it can be applied in the legal profes- 
sion. 

G. What results will follow ? 
7. State the conditions of application of division 
of labor to these professions. 



4:0 POLITICAL ECONOMY. 

8. "Why are the leading members of these profes- 
sions found in large cities ? 

9. Show how division of labor can be applied to 
teaching. 

10. Can division of labor be carried too far in 
teaching ? 

11. What is the business of the teacher ? 

12. Show why a school should not have too many 
teachers. 



CHAPTER IX. 

TERRITORIAL DIVISION OF LABOR. 

We will suppose that Smith has twenty acre? 
of land well adapted to produce wheat. It will 
produce thirty bushels of wheat to the acre. It 
will produce only twenty bushels of potatoes to 
the acre. If he puts all his land into wheat, he 
will have six hundred bushels. 

We will suppose that Hodge has twenty acres 
of land which is well adapted to produce pota- 
toes. It will produce seventy bushels of pota- 
toes to the acre. It will not produce more than 
fifteen bushels of wheat to the acre. If he plants 
all his land with potatoes, he will have fourteen 
hundred bushels. 

There will thus be produced more wheat 
and more potatoes than would be produced if 
Smith gave part of his land to potatoes, and 
Hodge gave part of his land to wheat. By a 
fair exchange, both parties would have a greater 
quantity of both products. WOuld it be wise 
and right for the government to say to Smith,, 
' ' You shall not supply yourself with potatoes by 
exchanging with your neighbor ; you shall grow 
them for yourself on your own land ?" 

Smith could plead that he could get more po- 
tatoes at the same cost of labor by exchanging. 



42 POLITICAL ECOISrOMY. 

He would think the action of the government 
absurd, and so would every man of common- 
sense. 

Application of the principle. — As different 
lands in the same neighborhood are adapted to 
different products, so different parts of the coun- 
try are adapted to different products. Each part 
of the country should devote itself to producing 
'those things to which it is specially adapted, and 
should supply its wants by exchanging with 
other parts. Massachusetts, instead of attempt- 
ing to grow oranges, should make shoes and ex- 
change them for oranges produced in Florida. 

A wider application. — What is true of differ- 
ent parts of a country is true of different parts 
of the world. Some countries are adapted to 
produce certain commodities, and other coun- 
tries, other commodities wanted by all countries. 
The wants of every civilized country require prod- 
ucts from every other country. Every civilized 
country makes use of products from every other 
civilized country. 

Now the sum total of products of every kind 
will be the greatest when each country devotes 
itself to producing those things for which it is 
best adapted — for which it has the best facilities. 
By a system of free exchange, each country will 
receive more of the commodities wanted than 
will be received by any other system. 

An erroneous notion. — Some persons think 
that every nation should produce every thing it 
uses, if it can possibly do so. They think that 
if a country imports an article which it can pro- 



TEERITORIAL DlVISIOi^ OF LABOR. 43 

diice, it is patronizing foreign industry at the ex- 
pense of home industry. 

Suppose that instead of producing silk as we 
miglit do, we import several milUons' worth of 
silk from Italy, It is thought by some that in 
so doing we give employment to foreign labor 
instead of giving employment to American la- 
bor. If we produce the silk in America, we give 
employment to foreign laborers. 

Is it true that by so doing we patronize Italian 
at the expense of American labor ? Let us see. 
We did not get the silk for nothing. It was 
not given to us. We bought it and paid for it. 
How did we pay for it ? Perhaps we raised 
wheat, took it to London, sold it, and took the 
money received for it to Italy and paid for the 
silk. American labor was employed in growing 
the wheat and taking it to London, and taking 
the money received for it to Italy. The labor 
employed in producing and transporting the 
wheat might have been employed in producing 
silk. In which way should it have been em- 
ployed ? What is the best way of employing 
labor ? 

Co7nmon-se7ise says, employ it in the way 
which will give the largest returns. Employ it 
in the way that will give the country the largest 
amount of silk. If a certain amount of labor 
employed in producing wheat will give the coun- 
try more silk than it would have if the same 
amount of labor were directly employed in pro- 
ducing silk, common-sense would say employ it 
in growing wheat. In either case, the silk is the 



44 POLITICAL ECONOMY. 

product of American industry ; in the one case 
directly, and in the other case indirectly. 

Another case. — We have large deposits of iron 
ore. We could make all the iron we use. Some 
men think we ought not to import any iron, be- 
cause we can make it ourselves. If it is said 
that foreign iron is cheaper, it is replied that we 
ought to be willing to pay more for American 
iron, because we thereby patronize American in- 
dustry. 

It can be shown that imported iron is really 
the product of American industry, just as it was 
shown that imported silk is the product of 
American industry. 

We do not get imported iron for nothing. 
We produce something to pay for it. To pro- 
duce that which we exchange for foreign iron 
costs a certain amount of labor. Now if the la- 
bor thus directed gives us more iron than we 
should get if it were directed to the production 
of iron from our ores, why should it not be thus 
directed ? Why not secure the largest returns 
for our labor ? 

In both cases, the iron procured is the result of 
American industry. The question is, how shall 
American industry be best employed with re- 
spect to iron ? — in producing it directly or indi- 
rectly ? 

Design of Providence. — The different portions 
of the earth are adapted to produce different 
commodities. The wants of men are numerous 
and varied, and require for their supply com- 
modities from every portion of the earth. Was 
it not the design of Providence, who has made 



TEKKITORIAL BIYISIOK OF LABOR. 45 

them thus mutually dependent, that they should 
live in peace and good-will, freely exchanging 
the products of their labor ? 

Questions. 

1. What supposition is made in the first paragraph? 

2. What in the second paragraph ? 

3. What conclusion is drawn from those supposi- 
tions ? 

4. What can be said of the supposed interposition 
of government ? 

5. What is said of the productive powers of differ- 
ent parts of the country ? 

6. How should the inhabitants of different parts 
supply their varied wants ? 

7. What is said of the productive powers of differ- 
ent countries of the earth ? 

8. What do the wants of every civilized nation re- 
quire ? 

9. What course should be pursued by the different 
countries ? 

10. What erroneous notion is mentioned ? 

11. State the illustration relating to silk. 

12. Show that imported silk is the result of Ameri- 
can industry. 

13. What should be the question as to the direction 
of labor ? 

14. State the illustration relating to iron. 

15. Show that imported iron is really the result of 
American industry. 

16. What should determine the direction of indus- 
try in regard to iron ? 

17. What was the manifest design of Providence ? 



CHAPTER X. 

RESTRICTIONS ON INDUSTRY. 

In former times, there were many restrictions 
laid on industry which interfered seriously with 
its exercise and productiveness. It is affirmed 
that in some countries, in ancient times, every 
man was compelled by law to follow the employ- 
ment of his father. 

In later times, governments have supposed that 
they were better qualified to determine the em- 
ployment of men than the men themselves. 

It has at length come to be understood that 
men's interest and tastes are better guides to the 
choice of employments than are the decrees of 
governments. It has come to be understood 
that that is most profitable for a nation which is 
most profitable for the individuals composing 
that nation. Individual prosperity, the result of 
honest industry, is never antagonistic to national 
prosperity. 

Apj^renticeshi}^. — In some countries, it is nec- 
essary, in order to engage in certain kinds of la- 
bor, to serve an apprenticeship of seven years. 
The object of this regulation is to secure skilled 
workmen. This and similar restrictions are un- 
known in the United States. Every employ- 
ment is open to all who choose to enter it. It 



EESTKICTIOKS OK IIs'DUSTRT. 47 

is found that free competition develops quite as 
much skill as the apprenticeship system. 

Mono2:>olies. — In former times, monopolies were 
common in all the countries of Europe. A mo- 
nopoly is the exclusive right to produce or deal in 
certain articles. Suppose the King of England 
(he has not power now to do so) should give to 
a company in London the monopoly of salt. No 
other persons could deal in that article. The 
monopolists might demand whatever price they 
chose, and the people must pay it ; for they 
could not do without salt. The monopolist has 
power to tax the community at will. Monopo- 
lies ought therefore never to be granted, directly 
or indirectly, by governments. All citizens 
should have equal rights in view of the law. 

Banking. — The privilege of issuing bank-notes 
to circulate as money, was, for many years, a mo- 
nopoly in this country. No bank could be estab- 
lished except by special permission in the form 
of a charter granted by the legislature. 

Restrictions have been very generally removed. 
By means of general banking laws, those who 
choose can en2:ao;e in the business of bankina; on 
complying with certain conditions designed to 
secure the public from loss. 

Patent laws. — Patent laws give to the inven- 
tor a temporary monopoly for his invention. 
The design is to reward the author of a useful 
invention. If the invention is useful, it will sell, 
and the inventor will be rewarded. When his 
patent-right expires, any one is at liberty to en- 
gage in the manufacture and sale of the article. 



48 POLITICAL ECOiq-OMY. 

Practical monopolies. — Thus far monopolies 
granted by governments have been considered. 
The existence of such monopoUes is substantially 
at an end in all enlightened lands. There are, 
however, monopolies in operation, the result of 
causes in some respects beyond the control of 
government. 

A railway is, in many respects, a monopoly. 
Where a single road connects two cities, there 
can ordinarily be no competition with it, with re- 
spect to the transportation of passengers and 
certain kinds of goods. The lav/ of the land 
should place such restrictions on railways as 
shall remove the more injurious features of a 
monopoly. The same remarks apply to the 
electric telegraph. 

Large capitalists often have it in their power 
to monopolize, for a time, the business in which 
they are engaged. They have the market for a 
commodity or certain commodities. If a person 
enters on the same business, they can put down 
prices so low as to ruin him if he is not a large 
capitalist. This has been done, and probably 
will be done again. 

This shows that something besides what are 
called the laws of trade are needed ; viz. , the law 
of right. The so-called laws of trade will not 
prevent the strong, if they are without moral 
principle, from oppressing the weak. 

Just restrictions. — Men should not be allowed 
to engage in any business which will interfere 
with the rights of others. Government should 
secure to every one his rights. 



RESTRICTION'S OK Iiq-DUSTRY. 49 

Men should not be allowed to engage in any 
business which may prove injurious to others, 
unless due provision is made for their security. 
Hence, men should not be allowed to deal in ex- 
plosive compounds, except under restrictions 
which remove danger to life and property. 
Such restrictions do not interfere with the rights 
of any one ; for no one has a right to injure 
others. No one has, under any circumstances, 
a right to do wrong. 



Questions. 

1. What employments were men compelled to fol- 
low in ancient times ? 

3. "What have governments in later times some- 
times done ? 

3. What have been found to be the best guides in 
the choice of employments ? 

4. What connection is there between the prosper- 
ity of a nation and of the individuals composing it ? 

5. What is said of the apprenticeship system ? 

6. How is the requisite skill secured in this coun- 
try? 

7. What is a monopoly ? 

8. Give an example. 

9. Why ought monopolies not to exist ? 

10. What is said about banking ? 

11. What permission was required ? 

13. In what way has the monopoly-feature been 
removed ? 
13. What is said of patent laws ? 



50 POLITICAL eco:n'omy. 

14. What is said of practical monopolies ? 

15. "What is said of railways ? 

16. Show how large capitalists may become mo- 
nopolists. 

17. What law is higher than the so-called laws of 
trade ? 

18. Mention some just restrictions. 



CHAPTER XI. 

CAPITAL AND LABOR. 

We have seen that wealth is the result of la- 
bor employed on materials furnished by nature. 
It may be asked, Has not capital something to 
do with the production of wealth ? Certainly it 
has. Let us see in what way. 

Capital is that portion of wealth which is em- 
ployed in carrying on business. 

The capital of the merchant consists of his shop 
and his goods offered for sale. These, if he 
owns them, are a part of his wealth ; but they 
may not constitute all his wealth. He may 
own the house in which he lives, a library, and 
railway stocks ; but, as these are not employed 
in carrying on his business as a merchant, they 
do not form a part of his capital. His wealth 
may be greater than his capital. He may have 
a pot of gold coin buried in his garden. That 
forms a part of his wealth, but not of his capi- 
tal. He may dig it up and use it in his busi- 
ness. Then it becomes a part of his capital. 

National capital is that portion of the nation's 
wealth which is used in carrying on the business 
enterprises of the nation. 

Labor before capital. — At first, man has noth- 



52 POLITICAL ECOKOMY. 

ing but Ms hands with which to labor. He soon 
fashions some rude tools, which render the labor 
of his hands more efficient. With his bow and 
arrows he can kill more birds than with his 
hands. His bow and arrows have value — are 
items of wealth. They are also items of capital. 
They are employed as instruments of produc- 
tion. 

Capital is the result of labor — the saved result 
of labor. It has been called accumulated labor. 
It can more properly be called the saved products 
of labor. If the laborer consumes every day all 
that he produces that day, he will never have 
any capital — unless it is given to him. If he 
saves a portion of what he produces, he may 
accumulate capital. If the farmer saves a por- 
tion of the corn he produces, he can exchange it 
for whatever form of capital he may desire. 

Labor by means of capital becomes more pro- 
ductive. Producers who have capital can pro- 
duce cheaper than those who are without capital. 
The larger capitalist can produce cheaper than 
the smaller capitalist. 

Increase of capital. — Wlien the people of a 
country produce more than they consume ; when 
they save a portion of their annual production 
and employ it in business — the capital of the 
country is increased. The production of a coun- 
try may be very great ; yet if it is all spent with- 
out being employed in conducting business, the 
capital of the country is not increased. 

If the surplus of production over expenditure 
is unwisely employed as capital and lost, the 



CAPITAL Ai^D LABOR. 53 

capital of the country has not increased, but has 
diminished. 

The increase of capital causes an increased de- 
mand for labor. Increased demand for labor 
tends to raise the wages of labor. 

In order to the increase of capital, frugality/ as 
well as industry is necessary. Industry and fru- 
gaUty are the great sources of national pros- 
perity. 

Capital in a new country. — When settlements 
are made in a new country, the first settlers sel- 
dom bring much capital with them. In conse- 
quence, they labor under great disadvantages. 
But the lands in a new country are generally 
very productive, and the industrious and frugal 
settler soon becomes possessed of capital, which 
enables him very rapidly to better his condition. 

Foreign capital. — The people of a new country 
need capital to enable them to develop the re- 
sources of the country. If foreigners see fit to 
lend them capital, and charge a reasonable price 
for the use of it, the capital thus procured may 
be of great service to the country. It may cause 
it to increase in wealth much more rapidly than 
would otherwise be the case. 

An objection. — It is objected that the interest 
paid for the use of foreign capital is sent out of 
the country. So it may be. If the borrower of 
a thousand dollars finds himself at the end of 
the year, and after having paid his interest, much 
richer than he would have been without the use 
of the thousand dollars, he has no reason to com- 



54 POLITICAL ECOI^rOMY. 

plain, and the country has no reason to com- 
plain. 

Questions. 

1. What is capital ? 

2. Of what does the capital of the merchant con- 
sist? 

3. Show the difference between his capital and his 
wealth. 

4. Of what does national capital consist ? 

5. Which is first in order — capital or labor ? 

6. What are man's original instruments of labor ? 

7. How does he acquire capital ? 

8. Of what is capital the result ? 

9. What has it been called ? 

10. What can it be more properly called ? 

11. Effect of capital on the productiveness of labor ? 

12. What advantage has the large capitalist ? 

13. When does capital increase ? 

14. What is the effect of increase of capital on the 
demand for labor ? 

15. What the effect of increased demand for labor ? 

16. What are the great sources of national pros- 
perity ? 

17. What is said respecting capital in a new coun- 
try? 

18. What is said of foreign capital ? 

19. What objection is stated ? 

20. How may it be answered ? 



CHAPTER XII. 

WAGES. 

Suppose there is a community made up of day- 
laborers. Every one has to labor with his hands 
to get the means of daily sustenance. No one 
has any thing saved — has any capital. 

Of course no one will wish to hire any one to 
labor for him ; for he has nothing wherewith to 
pay for labor. In a community without capital, 
there will be no demand for labor. 

Let a number of men of capital join that com- 
munity and engage in business. They will wish to 
hire men to labor for them ; there will be some 
demand for labor. 

In a community with a capital of one hundred 
thousand dollars, there will be a certain demand 
for labor. Wages will be at a certain rate. 

Let some persons with an additional hundred 
thousand dollars come into the place and engage 
in business. They will wish to employ laborers. 
If no additional laborers come into the place, 
they will try to hire some of those employed 
by men already in business. They will offer 
them some inducement to leave their employer. 
That inducement will be in the shape of higher 
wages. In other words, there will be a compe- 



5G POLITICAL ECOJS'OMY. 

tition for laborers among employers, and wages 
will rise. 

The rate of wages will tlius be determined by 
the amount of capital compared with the number 
of laborers. 

Suppose while the capital of a community re- 
mains the same, the number of laborers is doubled. 
There will now be a competition among laborers 
for employment. The newcomers vill offer to 
work for less than the old laborers are receiving. 
Wages will fall. 

Supi^ose half the capital of a community is 
lost or removed, while the number of laborers 
remains the same. The employers will discharge 
some of their laborers. Those anxious to retain 
their situations will offer to work at reduced 
wages. 

Thus the truth stated above is abundantly 
verified, that the rate of wages is determined by 
the amount of capital compared with the number 
of laborers. 

If capital increases while the number of labor- 
ers remains the same, wages will rise. 

If capital decreases while the number of labor- 
ers remains the same, wages will fall. 

If the number of laborers diminishes while 
capital remains the same, wages will rise. 

If the number of laborers increases while capi- 
tal remains the same, wages will fall. 

If the population of a country increases faster 
than its capital, wages will fall. 

If the capital of a country increases faster 
than its population, wages will rise. 



WAGES. 57 

It is for the interest of the laborer that capital 
should increase — that the rich should grow 
richer. It is the interest of every laborer that 
his employer should be prosperous. If from 
envy or any other cause, he obstructs the pros- 
perity of the capitalist, he does that which tends 
to his own injury. Capital is the fund from 
which labor is paid. It is the interest of the 
laborer that that fund should be increased. The 
larger it is, other things being equal, the higher 
his wages will be. If capitalists and laborers 
render obedience to the law, ' ' Thou shalt love thy 
neighbor as thyself," they will pursue the course 
best adapted to promote their pecuniary interests. 

Immigration. — We have seen that if, while 
the capital of a country remains the same, the 
number of laborers increases, wages will fall. 
Hence the tendency of the immigration of labor- 
ers is to lessen the wages of labor. That the 
great immigration of laborers here has not made 
wages low, is owing to the fact that the capital of 
the country has increased rapidly by production 
and borrowing. The increase of capital has kept 
pace with the increase of population by birth 
and immigration. 

Trades-unions. — Men engaged in the same 
employments sometimes form associations for 
their mutual benefit. They pay into the treasury 
of the association a portion of their wages. Thus 
a fund is secured. Sometimes, when employers 
propose a reduction of wages, or when the lead- 
ers see fit to demand higher wages, a strike is 
ordered. The members of the association refuse 



58 POLITICAL ECONOMY. 

to work. Those without means are supported 
by the funds above mentioned. Sometimes a 
large number of laborers are idle for months. 
Sometimes their demands are acceded to, and 
sometimes, after long idleness and much suffer- 
ing, they resume work at the old rates. 

Evils. — By these associations the great mass 
of laborers are brought under the control of a 
few men who may have their own ends to 
further. Oftentimes many of the laborers would 
gladly continue to labor, but are prevented by 
their leaders and associates. Violence is often 
done to those who would take the place of those 
who refuse to labor. 

Laborers have a right to combine for the pro- 
tection of their rights. They have no right to 
combine for doing wrong. They have a right 
to put their own price on their services, but they 
have no right to force men to pay that price. 
If not satisfied with the wages offered, they have 
a right to refuse to work, but they have no right 
to prevent others from working. 

So far as strikes destroy capital or hinder the 
increase of capital, they injure the laboring 
classes. 

Employers sometimes combine to lower wages. 
Being comparatively few in number, they can 
combine more readily and secretly than the 
laborers. They have no more right to combine 
for the purpose of arbitrarily lowering wages 
than have the laborers for raising them. 

Law of wages. — The fact that wages will be 
as the amount of capital compared with the 



WAGES. 59 

number of laborers, bas been called the law of 
wages. The term law implies something that 
we are to obey, and which we do right to obey. 
This would imply that it is right for the capital- 
ist to employ men at starvation prices if he can. 
He may say, " The wages I pay are the result of 
fair competition. My laborers were at liberty to 
accept or reject the wages offered. If those 
now employed leave me, there are others ready 
and anxious to take their places. A thing is 
worth what it will bring in an open market. T 
am paying all that wages will bring in an open 
market. It is true men cannot live on what I 
pay them, but that is not my concern." 

In the business affairs of men, a law higher 
than the so-called laws of political economy is 
needed — the law of justice. 



Questions. 

1. What demand for labor would there be in a 
community composed wholly of day -laborers ? 

2. Why? 

3. Suppose one hundred thousand dollars of capi- 
tal is brought into the community : what effect on 
the demand for labor ? 

4. Why? 

5. Suppose an additional hundred thousand of 
capital is introduced : what effect ? 

6. How is the rate of wages determined ? 

7. What is the tendency of an increased number 
of laborers ? 



60 POLITICAL ECONOMY. 

8. Suppose the capital diminishes while the num. 
ber of laborers remains the same ? 

9. Suppose the number of laborers increase while 
capital remains the same ? 

10. Suppose the population of a country increases 
faster than its capital ? 

11. Suppose the capital of a country increases 
faster than its population ? 

12. How is the interest of the laborer connected 
with that of the capitalist ? 

13. Obedience to what law would benefit capitalist 
and laborer ? 

14. "What effect has immigration on wages ? 

15. What are " trades-unions "? 

16. What is a strike ? 

17. How are the laborers supported during a strike ? 

18. State some evils resulting from the associations. 

19. What have laborers a right to do ? 

20. What have they not a right to do ? 

21. What is said about combinations of employers ? 

22. What is said to be the law of wages ? 

23. What does the use of the term law imply ? 

24. What law should be supreme in business mat- 
ters? 



CHAPTER XIII. 

MORALITY AND NATIONAL PROSPERITY. 

Morality on the part of a community tends 
to industry and frugality ; consequently it tends 
to national prosperity. 

Expensiveness of vice. — In a moral community, 
tlie expensiveness of vice is avoided. It is 
avoided just in proportion as a community is 
moral. In a perfectly moral community, there 
will be no vice. 

Consider the cost of a single vice — intemper- 
ance. The amount paid for intoxicating drinks 
amounts to hundreds of millions annually. The 
amount thus expended is expended unproduc- 
tively. It brings no pecuniary returns. It is so 
much value annihilated. 

If all the people were moral, this vast sum 
would be saved, and a large portion of it em- 
ployed in enterprises of industry. It would be 
added to the fund from which the wages of 
labor are paid. 

Drunkards are usually idlers. They do not 
belong to the producing class. The loss to the 
country occasioned by the idleness of an exceed- 
ing great army is to be set to the account of in- 
temperance. 

Loss of property. — Add to this the loss occa- 



62 POLITICAL ECOI^OMY. 

sioned by the carelessness and incompetency 
caused by strong drink, the accidents by sea 
and land, the breaches of trust, and the amount 
is largely increased. 

Consider the cost of legal processes relating to 
crimes caused by intemperance, and the cost of 
prisons, and you have another large item. 

Suppose the immense cost of intemperance 
were saved and added to the capital of the coun- 
try. Production would be greatly increased. 
The wages of labor would be augmented. 

Expensiveness of war. — If all men were moral, 
there would be neither private nor public wars. 
Consider the expensiveness of war. 

The soldiers are taken, for the most part, 
from the vigorous laborers of the country. They 
are changed from producers of wealth into de- 
stroyers of wealth. Consider the daily loss to 
the country when one hundred thousand or five 
hundred thousand productive laborers are trans- 
formed into soldiers ! 

The immense sums paid in wages to the soldiers 
form but a small part of the cost of war. There 
is the enormous cost of the materials used in 
war. There is the loss occasioned by the pa- 
ralysis of industry. There is the destruction of 
property in the portion of a country which is the 
seat of war. These give some idea of the ex- 
pensiveness of war. 

Suppose the cost direct and indirect of the 
late civil war had been saved and employed as 
capital, would laborers be out of employment, 
and would the cry of hard times be heard ? 



KATIOiq-AL PROSPERITY. 63 

Poverty. — If all men were moral, poverty 
would be unknown. We inhabit a bountiful 
earth, adapted to produce in abundance the 
necessaries, comforts, and luxuries of life. And 
yet there are millions in poverty ! 

To what is it owing ? Does population in- 
crease too rapidly for the capacity of the earth 
to furnish adequate sustenance ? 

This has been affirmed. JSIalthus taught that 
the tendency of population was to outrun capital 
— that is, to increase faster than the earth has 
capacity for producing food and the necessaries 
of life. Hence wars and pestilences are neces- 
sary to thin off the people and keep them from 
starving ! 

Let us see if the all-wise Creator has created 
men for whose support he has failed to make 
adequate provision. 

It is admitted that, in the present condition of 
things, population has a tendency to press on the 
means of subsistence. It is admitted that in 
some countries many perish for want of sufficient 
nourishment. 

To what is this owing ? Has the Heavenly 
Father failed to make sufficient provision for the 
wants of His children ? Why do such multi- 
tudes perish through want ? 

Suppose the father of a family proposes to 
take a voyage to Europe, and to be absent some 
months. He provides an abundant supply of 
provisions for his family during his absence. 

In course of two or three months, the members 
of his family begin to be in want. They are in 



64 POLITICAL ECO]S"OMY. 

want of flour, because they have rolled a number 
of barrels down a precipice to see the white cloud 
raised by their bursting. They are in want of 
other things which they have wantonly wasted. 
Can they blame their father for the want caused 
by their own folly and wickedness ? 

The case is similar to that of the great Father 
with respect to His children. He has furnished 
them with a world richly adapted to supply all 
their wants. He has commanded them to be 
industrious, temperate in all things, moral. If 
his commands had been obeyed, the popu- 
lation of the earth would have been very much 
greater than it is, and poverty would have been 
unknown. 

Men have wasted thousands upon thousands of 
millions in war, intemperance, and every form of 
vice, and then have complained that adequate 
provision has not been made for the supply of 
human wants ! 

Questions. 

1. State the connection between morality and na- 
tional prosperity. 

2. What is said of the expensiveness of vice ? 

3. Describe the cost of intemperance, mentioning 
the different items. 

4. What would be the effects if this cost were 
saved and added to the capital of the country ? 

5. Describe the cost of war, mentioning the differ- 
ent items. 

6. What effects if the cost of the late war had 
been saved and used as capital ? 



KATIOKAL PROSPERITY. 65 

7. What effect on poverty if a community were 
moral ? 

8. Why are so many in poverty ? 

9. What did Malthus teach ? 

10. What consequence follows his doctrine ? 

11. What does that doctrine imply in regard to the 
wisdom of God ? 

13. What supposition is made ? 

13. Apply it to the case in hand. 

14. Show how poverty might have been avoided. 



CHAPTER XIV. 

MONEY. 

Use of ploughs. — The plough is an instrument 
for upturning the soil — preparing, it for planting 
and sowing. The soil may be prepared by the 
spade ; but the plough is a better instrument for 
that purpose. Experience has shown that it is 
the best instrument for loosening the soil. 

Number of ploughs wanted. — In every country 
there are wanted a number of ploughs sufficient to 
do the ploughing. If one thousand will conven- 
iently and efficiently do the ploughing, then a 
greater number cannot be used to advantage. If 
there are two thousand ploughs, and only one 
thousand can be used to advantage, the remain- 
ing thousand will be of little value unless they 
can be sold. A sensible people will send them 
away and sell them. 

Carriages. — Carriages are instruments for con- 
veying persons from one place to another. For 
that purpose a certain number of carriages are 
wanted. If only ten carriages can be used to 
advantage, and one hundred are kept on hand, 
ninety of them are kept at a loss. If a man 
should say : " Carriages are good things ; let us 
get and keep as many of them as we can, ' ' he 
would not be regarded as a very wise man. 



MO]S"EY. 67 

Money. — Money is an instrument used in 
effecting exchanges of commodities, such as 
grain, hats, beef, watches, flutes, and other 
articles of value. 

Exchanges may be effected without money. 
The farmer may take his corn to the shoemaker, 
and receive shoes in exchange for his corn. The 
collier may take his coal to the miller, and re- 
ceive flour in exchange. The laborer may culti- 
vate the land of the tailor, and receive clothes in 
exchange for his labor. This kind of exchange 
is called barter. 

Barter is not a convenient mode of exchange. 
A man has potatoes to spare, and wants tea. The 
man who has tea to spare may not want potatoes. 
Now if the man who has potatoes can exchange 
them for a commodity which the tea-merchant 
wants, he can get his tea. Such a commodity is 
money. It is a commodity in universal request. 
If a man has any thing to dispose of, he is willing 
to dispose of it for money, because he can always 
buy for money whatever there is to be sold. 

Money is an instrument for facilitating ex- 
changes. It is an instrument by which exchanges 
can be effected more easily and economically 
than in any other way. 

Hoio much money is wanted in a country ? 
" The more the better," would be the reply of 
ignorance. 

How many ploughs are wanted in a country ? 

How many carriages are wanted in a country ? 

How much money is wanted in a country ? 

Enough to effect the exchanges of the country. 



68 POLITICAL ECON-QMY. 

As a country needs ploughs enough to do its 
ploughing, so it needs money enough to do its 
exchanging. As only a certain number of 
ploughs can be used to advantage in doing the 
ploughing, so only a certain amount of money 
can be used to advantage in doing the exchang- 
ing. 

Surplus commodities. — "When there is more 
flour in a country than is wanted to feed the 
inhabitants, the surplus is sent abroad if there is 
any demand for it abroad. 

Suppose a country needs a thousand barrels of 
flour, and two thousand barrels are produced. 
There is twice as much flour in the country as 
is needed for consumption. Flour will be cheap. 
If it is worth more abroad than it is at home, it 
will be sent abroad. 

If one should say, *' Flour is a good thing ; 
let us produce as much as we can and keep it all 
in the country. Don't let us allow any to be 
sent out of the country, ' ' he would not be re- 
garded as a wise man. 

A great deal of flour might thus be collected 
in the country. What effect would this accu- 
mulation of flour have on its value ? If there 
are three thousand barrels in a country, and only 
one thousand are needed for use, and if the other 
two thousand could not be sent abroad, how 
much more would the three thousand barrels be 
worth than one thousand ? Not a great deal. 

Whenever a country has more of a commodity 
than it needs, the commodity should be sent 



MOKEY. 69 

abroad, and exchanged for some commodity 
needed. 

This is as true of money as of any other com- 
modity. If there is more money in a country 
than is needed to effect the exchanges of the 
country, it should be sent abroad and exchanged 
for commodities which are needed. 

Some men are disposed to say, " Money is a 
good thing ; we cannot have too much of it. 
Let us get as much of it as possible. Let none 
be sent out of the country. ' ' 

By such a course, a great deal of money might 
be collected in a country ; what would be the 
effect of this accumulation on its value ? 

Suppose one hundred thousand dollars are 
needed to effect the exchanges of a country, and 
there are a million dollars collected in the coun- 
try. If they cannot be sent abroad, nine hun- 
dred thousand dollars will be useless. If the 
million could be used in effecting exchanges 
which can be effected by one hundred thousand 
dollars, the value of the million would not greatly 
exceed that of the one hundred thousand. Ob- 
serve, the supposition is that they cannot be sent 
abroad. 

If you use four coaches to carry four passen- 
gers, each carrying one, and can use them for 
nothing else, the value of the four coaches is not 
much greater than the value of one coach. Ob- 
serve, the supposition is that they must be used 
in carrying four passengers — that three of them 
cannot be sold. 



70 POLITICAL ECONOMY. 

Questions. 

1. What is a plough ? 

2. How many ploughs are wanted in a country ? 

3. What is a carriage ? 

4. How many are wanted in a country ? 

5. If there are more ploughs and carriages than 
are wanted to plough and carry passengers, what 
should be done with them ? 

6. What is money ? 

7. Can exchanges be made without money ? 

8. Illustrate. 

9. What is barter ? 

10. What is said of exchange by barter ? 

11. Why are men willing to exchange for money 
whatever they have to spare ? 

12. How much money is wanted in a country ? 

13. What should be done with surplus commodi- 
ties? 

14. What example is given ? 

15. If more flour is produced than is wanted, and 
it is all kept in the country, what effect on its value ? 

16. What woiild be thought of a man who should 
insist that as much flour as possible should be collect- 
ed and kept in the country ? 

17. What should be done with money when there 
is more than is needed to effect exchange ? 

18. Suppose a million dollars are used in doing 
what could be done as well with one hundred thou- 
sand? 



CHAPTER Xy. 

MONEY — (continued). 

The money of a country constitutes but a 
small i^art of its wealth. 

The wealth of a country comprises all objects 
having exchangeable value — lands, houses, ma- 
chines, gTain, furniture, money, clothes, etc. 
The sum of a nation's wealth is the sum of all 
its items of value. Money is a small item com- 
pared with the sum of all other items. It is an 
important part, but a very small part of national 
wealth. 

A farmer has a farm worth five thousand dol- 
lars. On an average he may have on hand, say 
thirty dollars. His property consists of five 
thousand dollars in real estate and thirty dollars 
in money. His money forms a very small por- 
tion of his wealth. 

A manufacturer has a factory, machinery, raw 
material, and manufactured goods. The value 
of the whole may be one hundred thousand dol- 
lars. He keeps on hand from three to five 
thousand dollars in money. His money consti- 
tutes a small part of his wealth. 

What is true of the farmer and the manufac- 
turer is true of nearly all the inhabitants of a 
country. The money of a country constitutes 
but a small portion of its wealth. 

A wrong notion, — For a long time it was 



72 POLITICAL ECONOMY. 

thought that money alone constituted wealth — or 
at least that money was wealth par excellence. 
Hence governments did all they could to bring" 
money into the country, and to prevent it from 
going out. Loans were made giving special 
privileges to those departments of industry which 
brought money into the country. Severe penal- 
ties were attached to the act of sending money 
out of the country. The great object was not 
an increase of the various articles of value needed, 
but simply an accumulation of the precious 
metals. 

Suppose all the stones of our country were 
turned into gold and silver : how much would 
gold and silver be worth if it could not be ex- 
ported ? 

Another wrong notion. — Some think that the 
money of a country is equal in value to all the 
other commodities in the country. They put 
the money in one heap, and all the rest of the 
property of the country in another heap, and 
consider them as equal in value. 

If all the commodities of a country were ex- 
changed at the same moment for money, the 
money used would equal in value all other com- 
modities. But all commodities are not exchang- 
ed for money thus simultaneously. Exchanges 
are successive. The same dollar is often the 
instrument of exchanging ten times its value in 
the course of a few hours. For example, a 
man pays a dollar for a shovel. The man who 
receives the dollar pays it for some tea. The 
tea merchant pays it to the blacksmith for shoe- 



MOKEY. 73 

ing liis horse. The blacksmith pays it to the 
miller for flour. The miller pays it to the 
farmer for chickens. The farmer pays it to the 
merchant for cotton cloths. Thus the same dol- 
lar is the instrument of effecting a large number 
of exchanges, but it is not equal in value to the 
aggregate of all the articles for which it was ex- 
changed. 

Material used for money. — The precious met- 
als, gold and silver, have been used by all civi- 
lized nations as the instruments of exchange. 
Why have they been so generally used ? 

Because they were found to be better adapted 
to that purpose than any other commodities. 
Steel is used for the material of edged tools, be- 
cause it is better adapted to that purpose than 
any thing else. Gold and silver are used for 
money for the same reason that steel is used for 
edged tools. 

The precious metals have great value in small 
bulk, can be divided without loss of value, are 
not liable to decay, and are less fluctuating in 
value than other commodities. These and other 
qualities render them better adapted for use as 
the instrument of exchange and the measure of 
values than any thing else. If they were perfectly 
invariable in value, they would be still better 
adapted to the purposes for which they are used. 

Questions. 

1. What part of a nation's wealth consists in 
money ? 

3. Illustrate in case of the farmer. 



74 POLITICAL ECONOMY. 

3. Illustrate in case of the manufacturer 

4. State the conclusion. 

5. What wrong notion is mentioned ? 

6. What was done in consequence ? 

7. Mention another wrong notion, 

8. Show it to be wrong. 

9. What material is used for money ? 

10. Why are gold and silver used ? 

11. State the qualities fitting them for the purpose. 

12. Suppose they were perfectly invariable in 
value ? 



CHAPTER XVI. 

COINAGE. 

At first, tlie precious metals passed hy weight. 
This rendered it necessary to have scales for 
weighing in connection with every act of ex- 
change. This was very inconvenient ; and in or- 
der to avoid this and other inconveniences, coin- 
ing was resorted to. Coins of different sizes and 
values were made, thus adapting them to the va- 
rious acts of exchange. The most valuable coins 
were made of gold, and less valuable ones of sil- 
ver. 

For coins of small denominations, copper was 
used. A silver coin of the value of twenty dol- 
lars would be unwieldy. 

The value of the coin depends upon the value 
of the gold and silver it contains — not upon the 
form, or the fact that it was made by the govern- 
ment. The government stamp is a certificate as 
to the quantity and purity of the metal contained 
in the coin. 

It may be said that if the value of a gold 
dollar does not depend upon the fact that it was 
made by the government, but upon the quantity 
and purity of gold it contains, then a gold dollar 
made by an individual would be as valuable as 
one made at the mint. 



76 POLITICAL ECONOMY. 

It would, if it contained just as much gold of 
the same fineness as the mint dollar. Such coins 
would not circulate as freely as mint dollars, be- 
cause of a want of confidence in their purity ; but 
their market value would be equal to that of mint 
dollars. If a man wished to buy gold for some 
purpose in the arts, he would give as much for 
the individual as for the government dollar. 

If individuals were allowed to coin money, 
there would be no security for the purity of the 
coin. Every piece would need to be weighed 
and tested. When issued by the government, 
there is greater security ; but the security is not 
absolute. 

History informs us that governments have 
sometimes been unfaithful to their trust in this 
matter. They have adulterated the coin ; that 
is, they have substituted baser metals for a por- 
tion of the gold and silver which the coin was 
declared to contain. This can be done without 
altering the name, form, and general appearance 
of the coin. 

Effect of adulteration. — So long as the adulter- 
ation is unknown, the base coin will circulate as 
well as the genuine. When the adulteration is 
discovered, the value of the coin will fall in pro- 
portion to the adulteration. If the coin contains 
half as much gold as the old coin, it will be worth 
half as much — will buy half as much. 

Suppose the government should resolve to put 
just half as much gold and silver in their coins as 
they have been accustomed to do. They do not 
change the denomination of the coin. They issue 



COINAGE. 77 

^old and silver dollars and half-dollars and dimes. 
The coins bear the same names as they do now, 
but they contain just half as much gold and sil- 
ver ; what would be the value of the new coin as 
compared with the old ? 

Suppose it were made in legal-tender for debts 
contracted under the old coinage. Suppose Con- 
gress should declare by an unanimous vote that 
the new dollars should be as valuable as the old 
ones : would they be thus valuable ? They would 
not. Men might pay their debts with the new 
coin ; they would not discharge their moral ob- 
ligations by so doing. They would defraud 
their creditor to the extent of half his claim. 
The debtor agreed to pay a certain number of 
dollars whose value was well known. He pays 
a certain number of dollars whose value is less 
by one half than the dollars in circulation at the 
time of the contract. 

The law may compel the creditor to submit 
to the fraud ; but it cannot compel the people to 
regard the new coin as valuable as the old. If 
they receive the new coin for goods, they will 
put a price on their goods proportionate to the 
value of the coin. A man asks a flour-dealer the 
price of a barrel of flour. Before he answers, he 
will learn in what kind of coin payment is to be 
m.ade. If he finds he is to be paid in the old 
coin, he will say, perhaps, " Eight dollars a bar- 
rel." If he finds it is to be paid in the new 
coin, he will say " Sixteen dollars." 

The value of money — that is, of gold and silver 
— is not the result of law. Legislation cannot ere- 



78 POLITICAL ECONOMY. 

ate gold, nor can it determine the value of gold. 
It can say that so much gold shall be called a 
dollar ; but it cannot fix the value — that is, the 
purchasing power — of that dollar. 

Questions. 

1. How did the precious metals at first pass ? 

2. To what inconveuience did they subject the 
dealer ? 

3. How is that inconvenience avoided ? 

4. Why are coins of different denominations and 
values ? 

5. Why are coins of the highest denomination 
made of gold ? 

6. What does the value of a coin depend upon? 

7. Wliat effect has the government stamp ? 

8. Why may not individuals make coin ? 

9. How have governments sometimes debased the 
coin? 

10. What is the effect of adulteration ? 

11. Suppose it is not discovered ? 

12. Suppose government should issue dollars hav- 
ing half as much gold as those now in existence ? 

13. Suppose they were made a legal-tender ? 

14. Suppose Congress should ordain that the new 
dollar should be just as valuable as the old ? 

15. What would be the purchasing power of the 
new coin ? 

16. What would be the effect of a decreased value 
of coin on prices ? 

17. Illustrate in the case of flour. 

18. Can an act of legislation create gold ? 



u ^ 



CHAPTER XYII. 

ON WHAT THE VALUE OF GOLD AND SILVER DE- 
PENDS. 

"We have seen in a former cliapter on wliat tlie 
exchangeable value of commodities depends. We 
have seen that it depends on the cost of produc- 
tion and the supply compared with the demand. 
We have seen that the value of commodities 
fluctuates. When the cost of production is les- 
sened, the value is commonly less, unless the de- 
mand is greatly increased. When the supply is 
increased, the value is less, unless it is met by a 
j. correspondingly increased demand. It is possible 

that the cost of producing an article can be 
greatly lessened, and yet the demand as com- 
A "K P^^^^ ^^t^i ^^^ supply may keep the value and 

price unchanged. 
/^ ■! The value of gold and silver depends upon the 

same principles which determine the value of 
iron, wheat, or any other commodity. 

The cost of producing gold consists mainly in 

the labor of mining. It, of course, includes the 

I/) cost of machinery used, and the wages and ex- 

y penses of the miners and workmen. This is one 

element of the value of gold. 

The other is the supply compared with the de- 
mand. 






80 POLITICAL ECOKOMY. 

If gold could be produced at no greater cost 
than iron, and in as gTeat abundance as iron, it 
would not be more valuable than iron. It would 
not be fitted for a circulating medium, and could 
be used only in the arts. 

If gold could be produced as easily and as 
abundantly as potatoes, its value would be com- 
paratively small. 

The cost of producing gold has been, during 
long periods, very uniform, and the annual 
amount produced very uniform. 

This is not owing to the nature of gold. The 
same thing might be true in regard to iron or 
lead or any other mineral. Whatever caused the 
deposits of gold to be as they are, caused the 
cost of producing it to be as it has been — in a 
good degree uniform. It is owing to the de- 
posits of gold that the annual yield has been in a 
good degree uniform. 

The facts might have been otherwise. Had 
they been otherwise, gold would have been dif- 
ferent both as to value and fluctuation. 

When the South American mines were dis- 
covered, the cost of producing gold was dimin- 
ished and the supply greatly increased. The con- 
sequence was a fall in the value of gold. 

The fall in the value of money appears in the 
rise of prices. It will take more gold to pur- 
chase the same articles. A gold dollar is a gold 
dollar still, but it has less purchasing power. 

The yearly production again became quite uni- 
form, and gold experienced but little change in 
value till the discovery of gold in California and 



GOLD AKD SILVER. 81 

Australia. The increased supply has diminished 
the value of gold. This appears in the general 
rise of prices. 

Silver, within a year or two past, has fluctuat- 
ed in value to a much greater degree than gold. 
The average price of silver for thirty years was, 
in the London market, about 60 pence per ounce 
in gold. In 1786, it fell to about 46^ pence per 
ounce, and then slowly rose till in January, 
1877, it was worth about 57 pence per ounce. 

This decline was probably owing to the ex- 
pected productiveness of the silver mines of our 
country, and to the fact that some of the leading 
nations of Europe have ceased to use it for 
money, except in what are called subsidiary coins. 

Money is used as the measure of value. That 
which is used as the measure of other values 
ought to be invariable in value itself. Gold and 
silver are not invariable in value ; but they are 
more so than any other articles which could be 
used as instruments of exchange. 

When a nation uses both gold and silver for 
coining, it becomes necessary for the government 
to fix the legal relative value between them. This 
is a work of great difficulty. Government cannot 
fix the real relative value. It can declare that 
so many ounces of silver shall be equal to an 
ounce of gold. It can proceed to coin gold and 
silver in accordance with that declaration ; but if 
the legal value, does not correspond exactly with 
the real value, the metal which has been under- 
valued will disappear from circulation. 

The relative value of gold and silver was fixed 



82 POLITICAL ECOiq"OMY.' 

when the mint was established in 1792, at 1 to 15.. 
This proved to be an undervahiation of gold. 
Very few gold coins were in circulation. Gold 
was sent abroad, where it had a higher value. 

In 1834, Congress sought to remedy the evil, 
and made the relative legal value I to 16. This 
was an error in the other direction. It was an 
undervaluation of silver. Gold coins came into 
circulation, and silver was sent abroad. 

In 1853, the coinage of silver was abandoned, 
except for subsidiary coins. Gold then became 
the standard measure of value. 

In 18*78, Congress restored the double stand- 
ard, and authorized a return to the coinage of 
silver. 

Questions. 

1. On what does the exchangeable value of com- 
modities depend ? 

2. What effect does lessening the cost of produc- 
tion tend to produce ? 

3. What is the tendency of an increased supply ? 

4. On what does the value of 2:old and silver de- 
pend? 

5. What does the cost of producing gold consist in ? 

6. If gold could be produced as easily as iron, what 
effect on its value ? 

7. Suppose it could be produced as easily and as 
abundantly as potatoes ? 

8. What is said as to the uniformity of the cost of 
producing gold ? 

9. To what has this been owins ? 



GOLD AKD SILVER. 83 

10. What took place when the South American 
mines were discovered ? 

11. How does the fall in the value of money ap- 
pear? 

13. What effect had the discovery of the Califor- 
nian and Australian mines ? 

13. What is said about the fluctuations of silver 
within a few years ? 

14. To what was the decline in value probably 
owing ? 

15. What should be true of the measure of value ? 

16. Are gold and silver invariable in value ? 

17. How do they compare with other commodities ? 

18. When gold and silver are used by a nation, 
what must the government do ? 

19. Can government fix the real relative value ? 

30. If, in fixing the relative value, one metal is un- 
dervalued, what takes place ? 

31. What was the relative value of silver and gold 
fixed in 1793 ? 

23. Which metal was undervalued ? 

23. What was the effect ? 

24. What was the relative value fixed in 1834 ? 

25. Which metal was undervalued then ? 

26. When was the double standard abolished ? 

27. When was it restored ? 



CHAPTER XVIII. 

A DOUBLE STANDARD. MONEY PLENTY AND 

SCARCE. EXPORTATION. 

Great Britain and Germany use gold alone 
as tlie standard of value. Silver is used for 
sums smaller than the lowest denomination of 
gold coins. It is a legal tender for such sums 
only. Those nations were led to adopt a single 
standard or measure of value by the inconven- 
iences resulting from a double standard. 

We have seen that the value of commodities 
does not depend upon legislation. Legislation 
may incidentally affect the value of commodities, 
and that very seriously ; but it cannot give value 
to that which is valueless in itself. If legislation 
could create wealth, we could dispense with all 
industry except the industry of legislation. 

The value of gold and silver does not depend 
upon legislation. It can say that a piece of gold 
or of silver worth a certain amount shall be worth 
double that amount ; but the value will remain 
unchanged. 

When a double standard is used, when both 
metals are coined and are alike made a legal-ten- 
der, the legal relative value between the two met- 



A DOUBLE STANDARD. 85 

als ought to correspond witli the real relative 
value, and ought to be invariable. 

Suppose standard yardsticks are, made of two 
different materials. One sometimes grows longer 
and the other shorter, and vice versa. The seller 
of cloth will use the shorter yardstick, for there- 
by he will sell more yards from the same piece. 

If the materials of which yardsticks are made 
are thus liable to expansion and contraction, it 
would be best to have all yardsticks made of the 
same material. And if, having two metals for 
the measure of value, one is liable to fluctuate 
more than the other, it would seem best to use 
but one metal. 

Money ivhen plenty. — When there is more 
money in a community than there is wanted to 
effect the exchanges, money is said to be plenty. 

In the minds of many men, plentifulness of 
money is associated with prosperity in the com- 
munity. But plentifulness of money does not 
necessarily indicate prosperity, and scarcity of 
money does not necessarily indicate adversity. 
We must look beyond the fact to the cause. 

Suppose the productiveness of every depart- 
ment of industry were suddenly doubled ; sup- 
pose there were twice as much flour, twice as 
much leather, twice as much iron, twice as much 
butter, twice as much of every thing except 
money. Suppose that the amount of money re- 
mained the same. The country, with all its pro- 
ducts doubled, would be richer than before — 
would be in a more prosperous condition. 

There would be twice as much to be ex- 



86 POLITICAL ECONOMY. 

changed, and not twice as much money to effect 
the exchanges. 

It would be like doubling the number of pas- 
sengers without increasing the number of coaches. 

There would not be money enough to eSect 
the exchanges ; money would be scarce, but the 
scarcity would not indicate adversity. It would 
indicate prosperity. 

Again, suppose the productiveness of every 
branch of industry should fall off one half, and 
the amount of money should remain the same. 
There would then be more money than would be 
wanted to effect the exchanges. Money would 
be plenty. But the country with the loss of half 
its products would not be in a very prosperous 
condition. In this case, the plentifulness of 
monc}^ would indicate adversity. 

A shalloiv remark. — Tt has been said that it is 
of little consequence what happens, provided all 
the money is kept in the country. This remark 
implies the old idea that money alone constitutes 
wealth, or the most important kind of wealth. 

Suppose one should say of a large storehouse 
filled with goods and liable to be consumed by 
fire : " It is of no consequence what becomes of 
the goods provided the trucks and wheelbarrows 
that took them to the building are saved. ' ' This 
remark would be about as sensible as the other. 

Money is one item of wealth, and a small one 
compared with the aggregate of other items. 
If it were preserved, and all other items lost, the 
country would not be in a very prosperous state. 

JN^o danger of excessive exportation. — If we have 



A DOUBLE STA]S"DARD. 87 

rtiore flour, cheese, or oil than is wanted for 
home consumption, we send it abroad, if there is 
a marliet for it. If the merchant can get more 
for bis flour in London than he can get for it in 
New York, he will send it to London. Every 
one tliinks he does a sensible thing by so doing. 
No one thinks the flour will all be sent out of 
the country, and that, in consequence, people 
will starve. They know that before suffering for 
want of flour would take place, the price would 
rise so that the merchant would make more by 
selling it at home than by sending it abroad. 

When there is more money than is wanted to 
effect home exchanges, it will be sent abroad and 
exchanged for what the country needs. When 
money is cheaper in New York than it is in Lon- 
don, it will be sent to London. When money is 
wanted at home, it will stay at home, just as when 
flour is wanted at home, it will stay at home. 

It may be said that money is always wanted at 
home. So it may be said that flour is always 
wanted at home ; but it does not follow that all 
the energies of a country should be directed to 
producing flour and keeping it in the country. 
In like manner, because money is always wanted 
in a country, it does not follow that all the ener- 
gies of a country should be devoted to producing 
it and keeping it in the country. If money, 
gold, could be collected till it was abundant as 
paving-stones, it would not be worth much more 
than paving-stones if it could not be sent out of 
the country and exchanged for what the country 
needs. 



88 POLITICAL ECONOMY. 

When one has come habitually to view money 
as a commodity whose value is determined by 
the same principles which determine the value 
of other commodities — that it is wanted for a 
certain purpose, just as hats are wanted for a 
certain purpose, and that when there is more 
than is wanted for that purpose it should l)e dis- 
posed of to the best advantage, he is in a con- 
dition to think correctly on matters pertaining to 
finance. 

If all the money in the country were annihi- 
lated and all other commodities remained, there 
would be loss and inconvenience; but the great 
bulk of national wealth would remain. 

Questions. 

1. What is said of the standard of value in Ger- 
many and England ? 

2. For what sums is silver a legal-tender in those 
countries ? 

3. What led those nations to adopt a single stand- 
ard? 

4. Can legislation create wealth ? 

5. What is affirmed of the value of gold and silver ? 

6. When two metals, or a double standard, is used, 
what should be true of the legal relative value of the 
two? 

7. State the illustration given relating to the yard- 
stick. 

8. Apply the illustration to money. 

9. When is money plenty in a community ? 
10. What does plentif ulness of money indicate ? 



A DOUBLE STANDARD. 89 

11. State the supposition in relation to increased 
production. 

12. What would the scarcity of money indicate ? 

13. State the next supposition made. 

14. AVhat would the plentifulness of money then 
indicate ? 

15. What shallow remark is noticed ? 

16. What notion does it imply ? 

17. What supposition is made ? 

18. How does it apply to the remark above noticed ? 

19. Suppose all the money in a country annihilated : 
what effect ? 

20. Show that there is no danger of excessive ex- 
portation of money. 

21. What should be done when there is more money 
in a country than is wanted ? 

22. Is not money always wanted ? Explain. 

23. Suppose gold should become as plenty as pav- 
ing-stones : what effect on its value ? 

24. When has one right ideas of money ? 



CHAPTER XIX. 

PAPER MONEY SO CALLED. 

We have seen that legislation cannot create 
wealth. Legislation cannot give value to that 
which is valueless. The legislature may vote that 
all the stones on a man's farm shall be gold ; but 
they will remain stones. The legislature may 
vote that stones shall have the same value as 
gold ; but they will have only the value of stones. 
Wealth is not created by legislation, but by in- 
dustry acting upon materials furnished by na- 
ture. 

Bank-notes. — Suppose you have in your hand 
a piece of paper on which is written or printed, 
" On demand we promise to give the bearer a 
sewing-machine," and signed by Wheeler & 
Wilson. Suppose some one asks you what you 
have in your hand. You will not answer, " I 
have a sewing-machine ;" for you have only the 
promise of a sewing-machine. 

You have in your hand what is called a five- 
dollar bill. You have the promise of a bank, or 
of the United States, it may be, to pay you five 
dollars. The note is a promise to pay money ; it 
is no more money than Wheeler & Wilson's prom- 
ise is a sewing-machine. Bank-notes are often 
called paper-money. They are really promises 



PAPER MONEY — SO CALLED. 91 

to pay money. Tlieir value depends upon the 
.ability and disposition of the promiser to pay. 

Legislation can increase the quantity of prom- 
ises to pay. That only requires paper, print- 
ing, and penmanship. To procure the material 
wherewith to pay those promises is another mat- 
ter. 

Bank-notes at par. — Bank-notes are said to be 
at par — that is, of equal value with legal coin — 
when they can be exchanged for coin at the will 
of the holder. If a man has bank-notes for one 
hundred dollars, and knows that by going to the 
bank just at hand he can receive for those notes 
one hundred dollars in coin, he will not ordinarily 
exchange them for coin ; for the paper is more 
convenient to handle. If he is sure that his 
notes are genuine, and that they will be paid in 
coin on presentation at the bank, he will retain 
and use them on account of their greater con- 
venience. Such notes are said to be redeemable 
at the will of the holder. 

All efforts to make irredeemable paper of the 
same value as gold have failed, and will always 
fail. 

Suppose one thousand dollars' worth of real es- 
tate for the ultimate redemption of every paper 
dollar issued ; yet, if the paper dollar is not re- 
deemable at the will of the holder, it will not be 
equal in value to coin. Such notes would have 
value, just as the note-of-hand of a man of 
means has value ; but it would not be equal in 
value to gold and silver. A man cannot pay his 
note at the bank in promises to pay, which are 



92 POLITICAL ECOKOMY. 

not kept. To pay liis note, lie must have money 
or what can be exchanged for money at will. 

When governments make mere promises to 
pay a legal tender, they authorize the debtor to 
cheat his creditor to the amount of the difference 
between the paper promise and money — that is, 
gold or silver coin. This is true, at least, of all 
debts contracted before the issue of the paper. 
When gold is said to be at ten per cent premium, 
the meaning is that a gold dollar is worth ten 
cents more than the paper dollar ; that is, the 
paper dollar as compared with gold is worth 
ninety cents. The debtor who pays in paper a 
debt contracted before the issue of the paper 
dollar, pays ten per cent less than he agreed to 
pay. He agreed to pay a real dollar. He does 
pay a nominal dollar worth ninety cents. 

If he contracted the debt after the issue of 
paper, if he agreed to pay in paper dollars, it is 
right for him to do so. 

Questions. 

1. Suppose the legislature declare that all stones 
shall be changed into gold ? 

2. What difference is there between a written order 
for a sewing machine and a sewing-machine ? 

3. What is the difference between a bank-note for 
five dollars and five dollars in money ? 

4. What are bank-notes often called ? 

5. What are they in reality ? 

6. What can legislators do with respect to paper 
money ? 



PAPER MOKEY — SO CALLED. 93 

7. What is a more difficult matter ? 

8. When will, bank-notes be at par ; that is, equal 
in value to gold or silver ? 

9. Why do the holders of such notes seldom de- 
mand specie ? 

10. What is said of efforts to make irredeemable 
paper of equal value with gold ? 

11. Suppose a thousand dollars' worth of land is 
pledged as security for each dollar note ? 

12. Why would not such notes be as good as coin ? 

13. When government makes them a legal tender, 
what does it authorize the debtor to do ? 

14. With respect to what debts is this true ? 

15. What is meant when gold is said to be at ten 
per cent premium ? 

16. Suppose a debt contracted after the issue of the 
irredeemable paper, in what may it be paid ? 

17. Whv? 



CHAPTER XX. 

ADVANTAGES OF A PAPER CURRENCY. 

Convenience. — If we can have bank-notes or 
any other paper promises to pay, which can at 
all times be converted into money at the will of 
the holder, these notes will circulate as money. 
They will, on account of their convenience, be 
preferred to coin. Five hundred or a thousand 
dollars in coin would be an inconvenient burden ; 
but five hundred or a thousand dollars in notes 
would have but little weight, and would occupy 
but little space. A sound paper currency is 
more convenient than a metallic currency. 

Economy. — Suppose ten millions of dollars are 
required to effect the exchanges of a country. If 
the currency be gold, the cost of the instrument 
of exchange will be ten millions of dollars. 

If five millions of gold be used, and five mil- 
lions of bank-notes, the cost of the instrument of 
exchange will be five million dollars, and the 
comparatively trifling cost of manufacturing the 
bank-notes. 

If less gold and more paper is used, the cost of 
the instrument of exchange — that is, the cost of 
exchange — will be still less. Paper costs less than 
gold. If exchanges can be made just as well by 



ADVANTAGES OF A PAPER CURRENCY. 95 

a paper as by a metallic currency, the cheapest 
instrument should be used. If iron ploughs 
turn up the soil as well as gold ploughs, it 
would be folly to use gold ploughs simply be- 
cause they cost more. If paper will do just as 
well as gold, it would be folly to use gold simply 
because it costs more — because it is gold. 

A mired currencij. — A. currency composed of 
bank-notes or of govenment notes redeemable at 
the will of the holder is, in reality, a mixed cur- 
renc}^. It is a paper currency on a specie basis. 
A purely paper currency will not be at par with 
gold and silver. Circumstances may cause it to 
approach very near to par ; but it may be laid 
down as a maxim that paper — that is, paper that 
cannot at any time be exchanged for coin — will 
not be at par with gold and silver. 

Previous to the issue of promissory notes by 
the United States, the currency of the country 
was a mixed currency. The banks issued, their 
notes payable on demand, and they were sup- 
posed to have specie enough in their vaults to pay- 
them on presentation. 

Amount of specie needed. — If for every dollar 
issued in notes the bank had a dollar in specie, 
the notes would form a sound and convenient 
currency, but there would be no gain on the 
score of economy. The bank might as well lend 
its specie as its notes. The currency would be 
more convenient than a metallic currency, but it 
would be more expensive by the cost of paper 
and engraving. If the specie were lent, the notes 
would not be needed. 



96 POLITICAL ECONOMY. 

Advantage of notes. — The bank can safely is- 
sue more notes than it has specie in its vaults, 
and it receives interest in advance on all the 
notes it lends. A bank has, say, twenty-five 
thousand dollars in specie. If it lent that, it 
would receive the interest of twenty -five thousand 
dollars. It lends, say, seventy -five thousand 
dollars of its notes. It thus receives interest on 
three times as much money as it has in its vaults. 

The chief advantage of a bank lies in the fact 
that it can issue notes and receive interest for a 
much greater amount than the specie it has on 
hand. 

The bank can issue its notes beyond the 
amount of specie it has, and still be pre oared 
to redeem all notes that may be presented. Is 
it asked. How can a bank issue more promises to 
pay than it has money to pay, and pay all prom- 
ises or notes which are presented ? 

If they were all presented at the same mo- 
ment, they could not all be redeemed. Twenty- 
five thousand dollars will not pay notes for 
seventy-five thousand. But it is certain that all 
the notes issued will not be presented for re- 
demption at the same time. Hence the amount 
of specie may be less than the amount of the 
notes issued. The currency is cheaper by this 
difference, and the profits of the bank are great- 
er in the same degree. 

Hoio much more paper can be issued than the 
amount of specie held by the bank, cannot be as- 
certained ; that is, the ratio between the paper 
and the specie cannot be fixed. It varies with 



ADVANTAGES OF A PAPER CURREN'CY. 9? 

circumstances relating to the financial condition, 
of the country. 

Attempts to fix the proportion have been 
made, but without success. Legislators have 
ordained that banks should have one dollar in 
specie for every three dollars in notes. But that 
regulation, if faithfully conformed to, would not 
render the currency safe. There may be a de- 
mand for specie which shall exhaust the resources 
of the bank long before all its notes are redeem- 
ed. In ordinary times, that proportion may be 
sufficient and more than sufficient ; but when, 
from any cause, confidence is weakened and a 
run on the bank takes place, the bank is soon 
compelled to suspend payment — that is, to re- 
fuse to pay its debts. 

Sometimes, when there is no demand for spe- 
cie, when the condition of trade is such that coin 
is coming into the country instead of going out, 
a much smaller proportion would be sufficient. 
An able and experienced bank president once 
said : "I have seen times when we had only 
five per cent of specie in our vaults, and we felt 
perfectly safe. I have seen times when we had 
sixty per cent of specie, and had to strain every 
nerve to increase the amount in order to be able 
to meet the demands upon us. ' ' 

The skilful banker can foresee when demands 
for specie are likely to be made, and make due 
preparation. He can learn when the course of 
trade is bringing specie into the country and 
when it is taking it out. When specie is flowing 
into the country, there will be no call on the 



98 POLITICAL eco:n'Omy. 

banks for specie. The specie of tlie banks will 
be increased. Men wlio receive it from abroad 
will take it to the banks and exchange it for 
notes on account of their convenience. 

When specie is wanted for exportation, men 
will take the notes of the banks and demand 
specie for them. The demand will continue so 
long as specie is wanted for exportation. The 
honest and skilful banker will be prepared to 
meet all demands. 

The legislature should not attempt to fix the 
amount of specie the bank should possess. It 
should require, under the severest penalties, the 
banks to redeem at sight all notes presented for 
redemption. 

When the legislature fixes the proportion, the 
bank may say, when its specie is all paid out and 
a large portion of its notes unpaid, " We have 
obeyed the law ; we issued three dollars in paper 
for one in specie ; we are obliged to stop pay- 
ment ; but we are not to blame, for we have 
obeyed the law !" A foolish law does not re- 
lieve men or institutions from moral obligation 
to pay their just debts. 

Effect of failure to redeem. — The moment a 
bank suspends payment — that is, refuses to pay 
its notes — those notes depreciate in value. The 
degree of depreciation will depend upon the sup- 
posed ability of the bank to pay the whole or a 
portion of its notes at a future day. The bank 
may have a large amount of property, so that the 
holders of the notes may feel quite sure that they 
will ultimately be paid. In such a case, the de- 



ADVANTAGES OF A PAPER CUEREi^CY. 90 

preciation may not be very great. Still those 
notes will not circulate as money. 

The loss caused by the failure of a bank falls 
on the holders of its notes at the time of failure. 

Various attempts have been made to establish 
banks without specie as a basis for circulation. 
They have all failed to furnish a currency at par. 

Suppose a bank should issue its notes, not 
redeemable in specie, but secured by the mort- 
gage of an immense amount of real estate. 
Such notes would have value, but they would not 
circulate as money. No device has been found 
for making promises on paper equal in value to 
money, without making them convertible into 
money at the will of the holder. 

Whi/ notes circulate. — Bank-notes, then, do 
not circulate as money on account of their being 
engraved, or on account of their being issued by 
a corporation authorized by the government ; but 
because the holders have confidence that they 
will be paid in coin on presentation to the bank. 

If, from any cause, this confidence is impaired, 
the notes will be taken to the bank for redemp- 
tion. If the bank is sound, its soundness will 
soon be made apparent, and confidence will be re- 
stored. If it is not restored by the prompt pay- 
ment of all the notes presented, depreciation will 
take place. An act of the legislature declaring 
that depreciation shall not take place would have 
just as much effect as a law repealing the law of 
gravitation. 



100 POLITICAL ECONOMY. 



Questions. 



1. When will bank-notes circulate as money ? 

2. Why will they be preferred to coin ? 

3. What, then, is the first advantage of a paper 
currency ? 

4. What is the next advantage mentioned ? 

5. Explain this advantage ? 

6. Of two instruments doing the work equally 
well, which should be used ? 

7. What is a mixed currency ? 

8. Can a purely paper currency be at par with 
gold? 

9. What currency had we before the issue of 
green-backs ? 

10. Suppose a bank has as many dollars in specie 
as it has issued notes : what advantage ? 

11. Can a bank safely issue more notes than it has 
specie ? 

12. How does that appear ? 

13. What must be the proportion of specie to the 
notes issued ? 

14. Can the proportion be fixed ? 

15. When does a bank require very little specie ? 

16. When does it require a great deal ? 

17. State the remark of a skilful banker. 

18. How can the bank be prepared to meet de- 
mands upon it ? 

19. When specie is wanted for exportation, whence 
is it drawn ? 

20. Why should not the legislature determine the 
amount of specie to be kept by the bank ? 



ADYAiq"TAGES OF A PAPER CURRENCY. 101 

21. What is the effect of failure to redeem ? 

22. What will determine the degree of depreciation ? 

23. State what is said about a real-estate bank. 

24. Why do bank-notes circulate as money ? 



CHAPTER XXI. 

DISADVANTAGES OF A PAPER CURRENCY. 

It will be seen that by a paper currency we 
mean a paper currency on a specie basis. We 
have considered some of the advantages of such 
a currency. We will now consider some of its 
disadvantages. 

Fluctuation. — If the quantity of coin in the 
country could be doubled in a few days, or if it 
could be lessened one half in a few days, it 
would fluctuate in value just as commodities 
whose quantity is increased or diminished rapidly. 
One year there is a great crop of apples ; apples 
are cheap. The next year there are very few ap- 
ples ; apples are dear. Apples thus fluctuate in 
value from year to year. The same would be 
true of coin, if its quantity could in like manner 
be increased and diminished in a short time. 

The quantity of coin cannot be rapidly in- 
creased or diminished. The process of produc- 
ing gold and silver is a slow one. The yearly 
products are quite uniform. 

The case is different with respect to a paper 
currency. It can be speedily manufactured. 
Millions can be made in a day. An article 
whose quantity can be so rapidly increased and 
diminished must be subject to great fluctuation 



DISADYAKTAGES OF A PAPER CURRE^TCY. 103 

in value. This liability of a paper currency to 
fluctuation renders it inferior in a very impor- 
tant respect to a metallic currency. 

Expansion. — We will suppose that from some 
cause there is an unusual spirit of enterprise in 
the community. Men think that they see good 
prospects of success in business. They want to 
borrow money. They appl}'^ to the banks. The 
banks, of course, wish to lend their notes ; they 
get as much interest on them as they would get 
on the same amount of gold. Lending their 
notes is the chief source of their profits. 

There is great competition among borrowers. 
They besiege the banks, and thus induce them to 
issue a large amount of notes. The currency is 
expanded. Money is plenty. 

The banks have now issued as many notes as 
they dare to issue. Some of the notes come in 
for redemption. They begin to feel the Jieces- 
sity of lessening their liabilities. They cease to 
discount paper ; that is, they stop lending their 
notes. Those paid in by their debtors are not 
issued again. They have already as much out- 
standing paper as they can manage. A course 
of contraction is necessary to their safety. This 
course will continue till a considerable portion 
of their notes have been called in. The quan- 
tity of currency in circulation is now less by one 
half, perhaps, than it was three months before. 

All this has taken place in the natural course 
of things. There has been no intention on the 
parts of the banks of causing suffering. 

But a great deal of suffering has been caused. 



104 POLITICAL ECONOMY. 

When money was plenty, made plenty by the 
liberal issues of the banks, men contracted obli- 
gations which they thought they could meet. 
They acted on the assumption that money would 
continue plenty, and could be easily borrowed. 
When the banks have ceased to lend, it is diffi- 
cult to borrow. Those men who incurred debts 
when money was plenty are now compelled to 
fail. 

Such expansions and contractions will, ever 
and anon, take place in the ordinary course of 
business. The fluctuation thus occasioned seri- 
ously interferes with the calculations and success 
of business men. 

Fraud. — Those who have control of a bank 
may issue notes with the intention of defrauding 
the public. They may issue their notes before 
their capital has been paid in — when they have 
nothing wherewith to redeem them. Or if they 
have their capital paid in, they may issue notes 
far in excess of their power to redeem them. 
Such a course could not be continued for a long 
time without awakening suspicions. Then spe- 
cie would be demanded and the notes become 
worthless. Those in the secret have exchanged 
their notes for real values. The loss falls on 
those holding the notes when the collapse of the 
bank takes place. 

Frauds of this kind have been frequently per- 
petrated. Fraudulent banking has cost the 
country hundreds of millions of dollars. This 
reduces the cheapness of a paper currency. 

Instances have occurred of men's paying for 



DISADVAi^TAGES OF A PAPER CURREi^CY. 105 

the stock of their banks with their notes-of-hand. 
They partook of the profits of villany, and when 
the end came, surrendered their stock and re- 
ceived their notes-of-hand. Such institutions 
are mere swindling machines. 

Forgery. — Bank-notes are hable to forgery. 
The engraving and signature of the officers of 
the bank can be so accurately imitated as to de- 
ceive all except experts. Those who do not 
handle much money are most likely to be de- 
ceived by the counterfeit note. Such persons 
are commonly least able to sustain loss caused 
by the possession of a counterfeit note. 

Coin is also liable to be counterfeited, but the 
counterfeit is more easily detected. Still there 
is often a large amount of base coin put into cir- 
culation. The disadvantage of forgery apper- 
tains in a measure to coin as well as to bank- 
notes. 

Questions. 

1. What is the first disadvantage of a paper cur- 
rency mentioned ? 

2. What would be the effect of sudden changes in 
the amount of coin in a country ? 

3. What illustration or comparison is made ? 

4. Show why the amount of coin cannot be sud- 
denly changed. 

5. Show how the amount of bank notes can he 
suddenly changed. 

6. How does this render a paper inferior to a me- 
tallic currency ? 



106 POLITICAL ECOi^OMY. 

7, Show how the banks may be led to issue a large 
quantity of their notes. 

8. What will prevent their keeping on issuing ? 

' 9. How will the amount in circulation be lessened ? 

10. What effect may this have on debtors ? 

11. Are the banks to be blamed for contracting 
their circulation ? 

13. What would take place if they did not ? 

13. Will such expansions and contractions continue 
to take place ? 

14. What evils do they cause ? 

15. State in what way fraudulent issues of notes 
are made. 

16. How long will such notes circulate ? 

17. What is their value when the fraud is discov- 
ered? 

18. On whom does the loss fall ? 

19. What other disadvantage of a paper currency is 
mentioned ? 

20. What persons are most likely to be deceived by 
counterfeit notes? 

21. May not coin be counterfeited ? 

22. Why is the evil less in case of coin than of 
"bank notes ? 



CHAPTER XXII. 

BANKS AS INSTITUTIONS FOR DEPOSITS AND 
LOANS. 

In treating of a paper currency, we have been 
led to speak of banks as f urnisliing a circulating 
medium. Banks as constituted in this country 
perform other important functions. 

They receive money on deposit, and keep it 
for the owner — paying it to him whenever he 
calls for it. 

In our large cities, men seldom keep much 
money in their places of business or in their 
dwellings. When they receive money, they send 
it to the bank, where it is entered to their credit. 
When they wish to pay any person money, they 
give him an order on the bank. This order is 
commonly called a check. The receiver sends 
his check to the bank, where it is entered to his 
credit. 

Thus the labor of keeping, counting, and 
transferring money from place to place is saved 
by the system of bank deposits. 

If every merchant in New York had to count 
the money used in every exchange, if he had to 
send it from his place from business to that of the 
person with whom the exchange is made, a very 
large number of clerks and messengers would be 



108 POLITICAL ECONOMY. 

required. All tliese are rendered unnecessary 
by a few moments' use of the pen. 

If every man kept liis own money instead of 
intrusting it to the bank for safe-keeping, a 
great number of watchmen would be employed. 

Banks of deposit and exchange are thus labor- 
saving machines. 

The banks do not charge their depositors any- 
thing for keeping and transferring their money. 
They compensate themselves by the temporary 
use of a portion of the amount deposited. Men 
are depositing money and drawing it out every 
day. Those who have charge of the bank soon 
learn the average amount deposited and the aver- 
age amount withdrawn every day. If they find 
there is constantly remaining on deposit a cer- 
tain sum, they can safely use a portion of that 
sum without interfering with the rights of their 
depositors. 

Banks of discount or loan. — In every com- 
munity, there are men who wish to borrow capital 
by means of which they can make their industry 
more productive. They wish to borrow money 
because they can by it procure any kind of capi- 
tal they may want. 

If there were no banks of loan, the borrower 
might have to spend time and labor in finding 
persons having money to lend. When found, 
those persons might not have the amount required. 
This trouble is avoided by going to an institu- 
tion whose business it is to lend money, and to 
accommodate borrowers with the sums they 
may require. 



BANKS OF DEPOSIT AND LOAN. 109 

Banks collect capital that is scattered about, 
and bring it within the reach of those who wish 
to borrow. The amount of loanable capital in 
the market is thus increased. 

Men who devote themselves to the business 
of lending money will acquire skill in the work. 
They will have an extended acquaintance with 
borrowers, and hence will make safer loans. It 
is for the interest of the whole community that 
there shall be no bad debts. 

A note is said to be discounted when the in- 
terest is deducted — that is, paid in advance. A 
man offers his note to the bank for one hun- 
dred dollars three months after date. If the 
bank conclude to lend him the money, they take 
his note and let him have a hundred dollars, less 
the interest for three months. They are said 
to have discounted his note. 

Thus, we see, banks perform important offices, 
besides furnishing a paper currency. 

The stock of a bank is its capital divided into 
shares. The owners of the stock are called 
stockholders. The stockholders elect a board 
of directors, to which is committed the geneial 
management of the affairs of the bank. The}'- 
choose a president and a cashier, on whom de- 
volve the more immediate conduct of the affairs 
of the bank. 

The directors meet on certain days to consider 
the notes offered for discount, and to decide 
which they will discount. 

The notes offered for discount are commonly 
for sixty or ninety days. At the end of that 



110 POLITICAL ECONOMY. 

time they are frequently renewed. A refusal to 
renew a note is often a cause of failure. 

The notes offered are signed by the applicant 
for discount, and indorsed by at least one re- 
sponsible person. The bank is thus supposed to 
have a double security for the payment of the 
note.* 

Questions. 

1. In our cities where do men keep their money ? 

2. In what way do they make payments ? 

3. What labor is saved by these means ? 

4. What would be required if every man kept his 
own money ? 

5. What effect would this have on the cost of ex- 
changes ? 

6. What do the banks charge for keeping and 
transferring money ? 

7. How are they compensated ? 

8. Show how they can safely use a portion of the 
money deposited. 

9. What advantage in having institutions for lend- 
ing money ? 

10, What labor is saved ? 

11. What skill is acquired ? 

13. When is a note said to be discounted ? 

13. Describe the process of discount at a bank. 

14. What is the stock of a bank. 



* The discounts of banks in the large cities are mostly upon 
what is termed commercial paper. That is, A buys a bill of 
goods of B, and gives his note, payable to B's order, at three or 
four months, for tl>e amount of the purchase. B, when he is in 
want of money, takes this note to the bank, which discounts it. 



BAiq^KS OF DEPOSIT AND LOAN. Ill 

15. What is a stockholder ? 

16. What officers do they elect ? 

17. What officers do the directors elect ? 

18. For what length of time are notes commonly, 
discounted ? 

19. What often takes place when the note is due ? 

20. How does it appear that the bank has a double 
security for the payment of notes discounted ? 



CHAPTER XXIII. 

INTEREST. 

When men Lire wagons and horses, they ex- 
pect to pay for the use of them. When they 
hire money, they expect to pay for the use of it. 
That which is paid for the use of money is called 
interest. To speak more correctly, that which 
is paid for the use of capital is called interest. 

Capital is commonly borrowed in the form of 
money. Many men do business on borrowed 
capital. A blacksmith is without capital. He 
needs a shop, tools, and iron, to carry on the 
operations of his trade. He borrows money 
and builds a shop, and buys tools and iron. 
His borrowed capital is now in the form de- 
sired. He borrowed money because he could 
thus more conveniently procure the items of 
capital needed. Men who do business on bor- 
rowed caj^ital usually borrow it in the form of 
money. 

It is right and reasonable that men pay for 
the use of money. Some think it wrong to re- 
ceive interest. The Jewish law forbade the 
taking of interest from a brother Jew. Some 
have thought the regulation binding on Chris- 
tians. 

Is it right for one to pay for the use of capi- 



INTEREST. 113 

tal in tlie shape of a horse, a wagon, a house, a 
farm ? If so, why is it not right to require one 
to pay for the use of capital in the shape of 
money ? Those who have wrong views on this 
subject are pretty sure to have wrong views in 
regard to the nature of money. When one sees 
that it is an item of wealth, a commodity useful 
for a certain purpose and depending upon the 
same laws of value as other commodities, he will 
see that interest is just as reasonable and lawful 
as rent. 

On ivhat the rate of interest depends. — If there 
are only a few horses for hire in a place, and if 
there are a great many persons who wish to hire 
horses, those who have the horses will charge a 
high price for their services. Horse-hire will be 
high. 

If there are many horses, and only a few per- 
sons who wish to hire horses, horse-hire will be 
low. 

The rate of horse-hire depends upon the num- 
ber of horses compared with the demand for 
them. 

The rate of interest depends upon the amount 
of loanable money in a community compared 
with the demand for money. If there is a small 
supply of money and a great many persons want 
to borrow money — that is, if the supply is small 
and the demand is great — the rate of interest will 
be high. If the supply of money is great and 
the demand small, the rate of interest will be low. 
Thus interest is liable to fluctuate, as well as the 
prices of other commodities. It may sometimes 



114 POLITICAL ECONOMY. 

be high, and sometimes low. Legislators may 
ordain that money shall be worth a certain sum, 
and so they may ordain that flour shall always 
be worth a certain sum. That will not hinder 
money or flour from being sometimes higher and 
sometimes lower. 

Interest in a neiv country. — The first settlers 
in a country are commonly men of limited means. 
In a new country there is very little loanable 
capital — very little capital in the form of money. 
There are many opportunities of employing 
capital with profit. Hence the demand will be 
great compared with the supply. Hence the 
rate of interest in a new and prosperous country 
will be high. 

Effect of risk. — If a man lets another have his 
horse, and if there is great risk that the horse be 
lost, he will charge a higher price for the loan. 
The risk incurred by the lender affects the rate 
of interest. Of two borrowers, the one who 
offers the best security will have the preference. 
If the rate of interest is six per cent on good 
security, the rate will be higher when the securi- 
ty is not good. The lender will require pay for 
the risk he runs. He will demand not only 
what the use of the money is worth, but some- 
thing additional for the risk he runs of losing it. 

Effect of wars and revolutions. — In countries 
which are the seat of war, or in which there are 
civil dissensions and threatened revolutions, there 
are two causes affecting the rate of interest. 
The paralysis of enterprise and industry will 
make the demand for capital small. There will 



II^TEREST. 115 

be increased risk. The small demand will tend 
to lessen the rate of interest. The increased risk 
will tend to raise it. This cause will be far 
more influential than the former. Hence the 
rate of interest will be high. 

Effect of bad government. — When the govern- 
ment does not execute justice between man and 
man, and when it oppresses its subjects, there 
will be risk connected with the loan of capital. 
As a consequence, the rate of interest will be in- 
creased. Well-established and well-regulated 
governments can borrow at a low rate of interest. 
Badly governed nations, like the republics of 
South America, can borrow only at a high rate, 
if they can borrow at all. 

Interest as regulated by law. — In former times 
it was thought that government ought to fix the 
rate of interest. It was thought that this was 
necessary to protect the borrower from the ra- 
pacity of the lender. It was thought that gov- 
ernment ought to fix the price of other com- 
modities in order to protect the buyer from ex- 
tortion on the part of the seller. 

It was at length seen that the best thing the 
government could do for buyers and sellers was 
to let them alone ; that government could not 
equitably fix the price of commodities ; that 
prices should be left to be adjusted by a free 
competition. It is now seen by all intelligent 
persons that such a course is best adapted to 
promote the interest of both buyer and seller. 

While it is admitted that government should 
not interfere in the case of other commodities, it 



116 POLITICAL ECOKOMY. 

is contended by some persons that it should fix 
the price of money. 

It is said that if the money-dealers are not 
forbidden by law, they will demand more for the 
use of money than the borrower can afford to 
pay ; there will be nothing to hinder them. 

It may be asked, What is to hinder the flour- 
dealer from demanding a higher price for flour 
than the buyer can afford to pay ? Flour is a 
necessary of life. Why will not the flour-dealer 
ask more for his flour than it is worth ? He is 
quite as anxious to make money as the dealer in 
money. 

Every one knows that the dealer in flour, un- 
less he has a monopoly, cannot fix the price of 
flour at will. He may ask what price he pleases, 
but he cannot compel men to pay. Competi- 
tion among sellers will fix the price and prevent 
it from becoming excessive. 

Why will not free competition among money- 
lenders prevent the price of money from becom- 
ing excessive ? 

Questions. 

1. When one hires a horse and wagon what does 
he expect ? 

2. When he hires money what does he expect ? 

3. What is interest ? 

4. In what form is capital commonly borrowed ? 

5. Why? 

6. Give an example. 

7. What was the Jewish law in regard to interest ? 

8. Does that law apply to Christians ? 



IN"TEREST. 117 

9. Show that it is right to receive pay for the use 
of money. 

10. What has led to wrong views on this subject ? 

11. Show on what the rate of interest mainly de- 
pends. 

13. What illustrations are given ? 

13. What is said as to fluctuation ? 

14. What is said of interest in a new country ? 

15. Show the effect of risk. 

16. Show the effect of wars and revolutions. 

17. Show the effect of bad government. 



CHAPTER XXIY. 

USURY LAWS. 

It lias been stated in a preceding chapter, that 
in former times it was thought proper that gov- 
ernment should fix the price of many if not of 
all commodities. Experience has shown that 
the interests of the people are best promoted by- 
leaving prices to take care of themselves by the 
process of free competition. It has been found 
that the true function of government is to give 
security to life and property, and to mete out 
justice between man and man. Governments 
were not made to engage in agricultural, manu- 
facturing, or commercial industry, but to fur- 
nish protection to the rights of individuals and 
corporations who may properly engage in those 
industries. Hence there is a tendency in all 
enlightened nations to interfere less and less 
with the business affairs of a country — to leave 
industry unshackled, except to prevent interfer- 
ence with the rights of others. 

It is admitted that the price or value of all 
commodities except money cannot be fixed by 
law. This is owing to the facts that their value 
fluctuates, is sometimes higher and sometimes 
lower. This is often owing to causes entirely 
disconnected with the government, and over 



USUEY LAWS/ 119 

wliicli the government lias no control. The val- 
ue of flour, hats, cloths, fluctuates. Flour is 
one year, owing to a short crop, worth ten dol- 
lars a barrel, and the next year, owing to a good 
crop, it is worth six dollars a barrel. The gov- 
ernment had no control over the crops. 

It would not be wise and right for government 
to compel men to sell flour for six dollars when 
it is worth ten. It would be wrong to compel 
men to buy and sell flour at the same price dur- 
ing those two years. 

If a law were passed fixing the price of flour 
at eight dollars a barrel, it would not have the 
effect designed. Men will not sell flour for eight 
dollars when it is worth ten. Men w411 not pay 
eight dollars for flour when it is worth only six. 

We will suppose that severe penalties are at- 
tached to the violation of the law fixing the 
price of flour ; that if a seller asks more than 
the legal price he shall forfeit the flour to the 
buyer. 

Such a law would never make men exchange 
ten dollars for eight. No man will give away 
two dollars in connection with the sale of every 
barrel of flour. The practical working of such 
a law would be as follows : 

Flour, we will suppose, is worth ten dollars a 
barrel. The law fixes the price of flour at eight 
dollars. The man who takes more than eight 
dollars violates the law. 

There are conscientious men who will not vio- 
late the law. They will withdraw their flour 
from the market. That will lessen the supply. 



120 POLITICAL ECONOMY. 

Tliat will tend to raise the price of flour stiil 
more. The object of the law was to keep down 
the price of flour. The act of withdrawal caused 
by the law has a tendency to raise the price 
higher than it would have been without the law. 
"VVe have thus seen one effect of the law. 

Now let us look at another effect. The con- 
scientious men have withdrawn from the busi- 
ness. It is now in the hands of men who are 
ready to violate the law. Of course they are 
ready to take advantage of their customers. 

It may be said that the danger of forfeiture 
will prevent them from breaking the law. 

It will lead them to evade the law, and they 
will make the buyer pay for the risk they run in 
so doing. Flour, we will suppose, is worth ten 
dollars a barrel. Buyers are willing to give 
that for it. One offers the dealer ten dollars for 
a barrel, knowing that he cannot get it for less. 
The seller remarks that he cannot take ten dollars 
because it would be contrary to law. " My 
price, ' ' he says, ' ' when I sell is eight dollars. 
I will sell you a barrel for eight dollars, provided 
you will also buy a jack-knife." The price of 
the knife is four dollars. The buyer pays eight 
dollars for the flour and four for the knife. If 
there had been no law respecting the price of 
flour, he could have got a barrel for ten dollars. 
Now for twelve dollars he has a barrel of flour 
worth ten dollars, and a knife worth fifty cents. 
He has paid at least one dollar and fifty cents 
more for his flour than he would have paid but 
for the law designed for his protection. He has 



USURY LAWS. 121 

paid one dollar and fifty cents as an offset to the 
risk run by the seller in evading the law. 

Money fluctuates in value as flour does, but 
less in degree. It is worth more at one time than 
at another. When there is a legal rate, it is 
sometimes worth more than the legal rate, and 
sometimes less. When it is worth more than 
the legal rate, conscientious men who will not 
violate the law withdraw their money from the 
market and employ it in some other way. This 
diminishes the supply of money to be loaned, 
and has a tendency to raise the price. The 
market is then in the hands of men who will 
evade the law, and make the borrower pay for 
the risk of so doing. 

The effect will be, as was seen in the case of 
flour, to make the borrower pay more' than if 
the rate had not been fixed by law. 

Thus usury laws instead of favoring the bor- 
rower injure him. Instead of keeping the price 
of money uniform, they cause greater fluctuation 
than would otherwise take place. 

The price of money, like that of all other 
commodities, should be agreed upon by the par- 
ties concerned. Wlien no agreement is made 
between the borrower and the lender, the law 
should fix the rate, in order to prevent dispute 
and litigation. 

Questions. 

1. What has experience shown ? 

2. What is the business of government ? 

3. What is the present tendency ? 



122 POLITICAL ECOKOMY. 

4. What truth is admitted ? 

5. To what is it owing ? 

6. Illustrate in the case of flour. 

7. Suppose a law fixing the price of flour : what 
effect if fixed too low ? 

8. What will conscientious men do ? 

9. What effect on the price ? 

10. What will other men do ? 

11. Show how they may evade the law. 

12. What effect on the buyer ? 

13. Has the law been of benefit to him ? 

14. What is said of the fluctuation of money as 
compared with flour ? 

15. Suppose a legal rate is fixed, and money is 
worth more than that rate ? 

IG. What will conscientious men do ? 

17. What will result from their action ? 

18. What will other money-lenders do ? 

19. What will the borrower be compelled to pay ? 

20. What the design and the effect of usury laws ? 

21. When should the rate of interest be fixed by 
law? 



CHAPTER XXY. 

THE CREDIT SYSTEM. 

A MAN may have learned the blacksmith's 
trade. He has strength and skill, but is without 
capital. He has no shop, no tools to work with, 
no material to work upon. He can labor as a 
journeyman blacksmith till he has saved enough 
from his wages to purchase the articles needed 
in order to do business on his own account. 
This may take a long time. 

If he can borrow the necessary capital, he can 
set up for himself at once. It is quite possible 
that by so doing he may make enough to pay 
for his shop and tools sooner than by saving his 
wages. 

Suppose that by borrowing money with which 
to purchase a shop and tools, he can in seven 
years make enough to repay the loan. 

Suppose it would take him ten years to pay 
for a shop and tools by his wages as a journey- 
man. He would by means of credit be as well 
oft at the end of seven years as he would be at 
the end of ten years without credit. By means 
of credit he gains three years of increased pro- 
duction. At the end of ten years he will own 
his shop and tools, and probably a house and 
other things, the product of the last three years' 



124 POLITICAL ECO]!^OMY. 

labor. A system of credit is therefore beneficial 
to those who have skill without capital. 

If a man is honest and industrious, men will 
lend him money on such security as he can give. 

His industry and skill will be thus rendered 
more productive. He v/ill benefit himself, and 
in so doing, will benefit others. 

In order that there may be borrowers, there 
must be lenders. If it is proper to borrow 
money, it is proper to lend money. 

Some men have a prejudice against money- 
lenders — men who live on the interest of their 
money — as though they lived on other people's 
labor. 

Suppose that, instead of lending his money, a 
man invests it in sewing-machines, and lends his 
sewing-machines. He requires his customers to 
pay for the use of his machines. His charges 
are reasonable, and no one thinks of complaining 
on account of his taking pay for the use of his 
machines. There is no difference in principle 
between requiring pay for the use of capital in 
the form of money, and requiring pay for the use 
of capital in the form of sewing-machines. 

It is proper, therefore, and for the advantage 
of the community, that some men should devote 
themselves to the business of lending to other 
men. They aid in facilitating the system of 
credit which we have seen may be of great ad- 
vantage to the individual and to the community. 

While the credit system is a good thing, yet 
it may be extended too far, and produce very 
evil results. 



THE CEEDIT SYSTEM. 125 

The credit system is of advantage to the com- 
munity. National wealth is the aggregate of in- 
dividual wealth. Whatever aids individuals by 
honest industry to enrich themselves more rap- 
idly, enriches the country more rapidly. 

Were it not for this system, a great deal of 
capital would remain unemployed. A man en- 
gages in business — in manufacturing. He is 
prosperous and increases his capital, thus enlarg- 
ing his business. But there is a limit to this en- 
largement. When it has become as extended 
as is desirable, he will wish to dispose of his 
gains so that they may be a source of income. 
Accordingly he will place them in the money 
market for loan. 

But for the credit system, those gains would lie 
unused and unproductive. 

Men would be tempted to extend their business 
beyond their capacity to manage it. 

It is the interest of the laborer that all the 
surplus production of a country should be used 
as capital. It is thus added to the fund that cre- 
ates the demand for labor. But for the credit 
system, the number of laborers employed w^ould 
be much smaller than it is. 

The system of credit should not be carried to 
excess — that is, too much business should not be 
done by means of borrowed capital. The fre- 
quent crises in the commercial world are generally 
caused by an undue extension of credit. 

When there is a paper currency which can be 
easily expanded, the danger of an abuse of the 
credit system is the greatest. Men borrow 



126 POLITICAL ECOiq"OMY. 

money and extend tlieir business, so that con- 
tinued borrowing is necessary. What is done 
by one will be done by another. One man sees 
his neighbor enlarge his business by means of 
borrowed capital. He is stimulated to do the 
same. Men are anxious to borrow, and those 
who have money are willing to lend ; for the 
more they lend, the more interest they get. It 
at length happens that the resources of the 
lenders are exhausted ; they have no more to 
lend. But the borrowers have so extended their 
business that they must borrow more or fail. 
There is no more money to be had ; or if there 
were, the lenders would be slow to lend to those 
who have extended their business to such an ex- 
tent. 

The consequence is the failure of one and then 
of another, till there is a very general bankruptcy 
among business men. 

The frequent financial crashes caused by an 
abuse of the credit system doubtless caused the 
remark, said to have been made by General An- 
drew Jackson, that " those who do business on 
borrowed capital ought to break. ' ' 

The abuse of a thing is not an argument against 
its legitimate use. 

Questions. 

1. In wiiat two ways can one who has learned 
the blacksmith's trade get a shop and tools ? 

2. Show how the second mode may operate to his 
advantage. 



THE CREDIT SYSTEM. 127 

3. "What may be said of a system of credit ? 

4. To what class of men does it especially offer 
advantages ? 

5. What is said with respect to lenders ? 

6. What prejudice is noticed ? 

7. Show that this prejudice is unfounded. 

8. What is said as to the extension of credit ? 

9. What is said of the advantages of the system ? 

, 10. Without it, what would be true of a great deal 
of capital ? 

11. How does that appear ? 

12. What is said of the interest of the laborer ? 

13. How does that appear ? 

14. What are financial crises usually caused by ? 

15. Show how such crises take place. 

16. Why do a succession of failures take place ? 

17. What remark is ascribed to Andrew Jackson ? 

18. What maxim was disregarded in making that 
remark ? 



CHAPTER XXYI. 

RENT. 

Rent is that wliicli is paid for the use of land. 
In a new country land can often be had for noth- 
ing. So long as such a state of things continues, 
land will not command rent. Men will not pay for 
the use of that which they can have for nothing. 

When lands have been appropriated, they will 
command rent in proportion to their productive- 
ness. The more productive a piece of land is, 
the more men will be willing to pay for the use 
of it. 

Situation tvith reference to market has an in- 
fluence on rent. Of two farms equally produc- 
tive, the one best situated with respect to market 
will command the higher rent. Very fertile 
land far removed from market will command lit- 
tle if any rent ; for the cost of transporting prod- 
ucts to market may prevent profit. 

The effect of railways and canals is to increase 
the vahie of land in their vicinity. Whatever 
brings lands nearer to market, or, what amounts 
to the same thing, diminishes the time and cost 
of bringing things to market, increases their val- 
ue. The railways and canals of our country have 
added many millions to the wealth of the country 
by increasing the value of lands. 



REITT. 129 

They also affect tlie price of agricultural prod- 
ucts in a way to benefit both the seller and the 
buyer. Before the Erie Canal was constructed, 
wheat was very cheap in Western New York and 
very dear in New York City, on account of the 
cost of transportation. The canal lessened the 
cost of transportation, raising the price of wheat 
in Western New York and lowering the price in 
New York City. Thus both parties were bene- 
fited. 

Lands in the vicinity of cities are more valuable 
than lands at a distance. The farmer in the vi- 
cinity of the city has wellnigh a monopoly of 
certain vegetable products. Moreover, land in 
the vicinity is wanted for building purposes, and 
consequently commands a high price. 

Manufacturing establishments increase the val- 
ue of lands in their vicinity. Numerous laborers 
are employed. This creates a demand for agri- 
cultural products. 'J'hey are supplied to the best 
advantage by farmers in the vicinity. 

The character of the surrounding population 
has an influence on the value of land. A farm 
in the midst of an intelligent, moral, industrious, 
law-abiding community is worth more than one 
of equal fertility in the midst of an ignorant and 
vicious population. Hence whatever tends to 
increase intelligence and morality tends to in- 
crease the value of real estate. 

The income from land is commonly less than 
the income from capital in other forms. Capital 
in the form of land is more secure than capital 
in most other forms. Banks may break, ships 



130 POLITICAL ECOK,OMY. 

may be wrecked, manufactories may be burned 
or swept away by a flood, but land is, for the 
most part, secure. Because of its greater se- 
curity, men are content with less income from 
their investment in land. The landlord, it is 
true, may lose his rent ; but he cannot, in the 
ordinary course of nature, lose his land. 

Land in cities commands a high price for build- 
ing and business purposes. A few square feet 
of land in the business parts of New York City 
will command a higher price than a large farm 
in the interior. 

Some writers have affirmed that if all lands 
were of equal fertility they would not command 
rent. They affirm that the varying and decreas- 
ing fertility of lands is the cause of rent. They 
have mistaken the ineasure of rent for its cause. 

Questions. 

1. What is rent ? 

2. What is said of rent in a new country ? 

3. When lands command rent, wliat will the rent 
be proportioned to ? 

4. What, besides productiveness, has an influence 
in determining rent ? 

5. Illustrate. 

6. What is the effect of railways and canals ? 

7. How do they affect the price of agricultural 
products ? 

8. Give an example. 

9. What is said of lands in the vicinity of cities? 
10. What is said of manufacturing establishments ? 



KEKT. 131 

11. What effect has the character of the surround- 
ing population ? 

12. What is said of the income from investment in 
land ? 

. IS. Why are the owners of land content with less ? 

14. Why does land in cities command a high price ? 

15. To what have some writers said that rent is 
owing ? 

16. What mistake do they make ? 



CHAPTER XXYII. 

TAXES, 

Every nation must have a government. Its 
operations cannot be carried on without expense. 
This expense must be borne by the people for 
whose benefit the government exists. Provision 
for this expense must be made by taxation. 

Taxes are of two kinds, direct and indirect. 

A direct tax is a sum assessed upon every tax- 
payer in proportion to the property he possesses 
or is supposed to possess. If the exact amount 
of property possessed could be known, a certain 
percentage levied on all property would, it is 
thought, constitute a just tax. This would be 
true if all persons ought to be taxed in exact 
proportion to their property. 

Let us look at the matter. Mr. A. has prop- 
erty worth ten thousand dollars. It brings him 
in, we will suppose, ten per cent per annum. 
His income from his property will be one thou- 
sand dollars. 

Mr. B. has property worth one hundred thou- 
sand dollars. It brings him in, we will suppose, 
ten per cent. His income will be ten thousand 
dollars. If the taxes are one per cent, Mr. A. 
will pay one hundred dollars, and Mr. B. one 
thousand dollars — ten times as much as A. Some 



TAXES. 133 

persons think that B. should, on account of hav- 
ing more property protected, and on account of 
superior pecuniary ability, pay at a higher rate 
than A. 

Again, A. has property worth ten thousand 
dollars. His income from it is a thousand dol- 
lars. B. has property worth ten thousand dol- 
lars. His income from it is two thousand dol- 
lars. The latter is able to pay a higher tax than 
the former. Should he be required to do so ? 

Would it not be equitable to tax men in pro- 
portion to their net incomes ? 

An income-tax may be the most equitable if 
the income of each one could be exactly ascer- 
tained. This is in some cases impossible. The 
inquisition relating to the personal business of 
each one has always rendered an income-tax a 
very unpopular tax. 

It cannot be denied that in many cases there 
is but a remote approximation to justice in the 
levying of direct taxes. This is owing in some 
cases to defects in the laws, and in other cases to 
a want of honesty. 

An indirect tax is a sum levied on goods im- 
ported, or on articles produced in the country. 
A tax on imported cloth is an indirect tax. A 
tax on matches is an indirect tax. A tax on 
gold watches worn is an indirect tax. 

Indirect taxes are paid hy the consumer of 
the taxed article. The importer pays the tax on 
the broadcloth he imports. He adds it to the 
price charged to the wholesale dealer. The 
wholesale dealer does the same with respect to 



134 POLITICAL ECOiq"OMY. 

tlie retail dealer. The retail dealer throws the 
increased price on his customers. Suppose the 
tax on broadcloth is one dollar a yard. The 
man who buys a broadcloth coat pays one dollar 
a yard on the score of taxes — pays one dohar a 
yard more than he would pay but for the tax. 

Hence, when taxation is indirect, the taxpayer 
pays in proportion to what he consumes, not in 
proportion to what he possesses. An indirect 
tax may tax the poor more heavily than the rich. 
If, therefore, men ought to contribute to the 
support of government according to their pro- 
perty, indirect taxation is not a just mode of 
taxation. 

It is urged in favor of an indirect tax that it 
is more easily collected. This is true so far as 
a tax on imports is concerned. The ports of en- 
try are few in number, and a few men stationed 
at each port can collect the taxes. Whereas, in 
case of a direct tax, the assessors and collectors 
must visit nearly every family in the land. 

It is said that an indirect tax is more willingly 
paid, since the people do not know when they 
pay it, as it is blended with the prices of articles 
bought. 

This consideration ought not to be urged in 
favor of indirect taxation. The people ought to 
know what they pay and when they pay it. It 
will make them more watchful over government 
expenditure. This will have a tendency to check 
extravagance and corruption. 



TAXES. 135 



Questions. 

1. By what means are the expenses of government 
met? 

2. What is a direct tax ? 

3. Ought every one to pay in proportion to his 
property ? 

4. For what have some contended ? 

5. What is said of a tax on incomes ? 

6. Why is an income-tax unpopular ? 

7. What is an indirect tax ? 

8. Give examples. 

9. Who pays the indirect tax ? 

10. Show how this takes place. 

11. What is said of the justice of an indirect tax ? 
• 13. What is said about its collection ? 

13. Why is it more willingly paid ? 

14. Show that this is an objection. 



CHAPTER XXYIII. 

GOVERNMENT EXPENDITURE. 

How much should be expended for the sup- 
port of government ? As much as is necessary 
to secure a good government, and no more. 

Some think that because the money paid for 
the support of government is usually expended 
in the country, it is of little consequence how 
much the government expends. " The money," 
they say, "is all in the country." Here you 
see the erroneous notion respecting mondy 
spoken of in a former chapter. 

All expenditure beyond what is necessary to 
secure a good government is unproductive ex- 
penditure. A large portion of what is raised by 
taxes is taken from the capital of the country, or 
a large portion of it would have been added to 
the capital of the country, were it not for taxes. 
For example : a large manufacturer pays twenty 
thousand dollars in taxes. If he had not to pay 
the twenty thousand in taxes, he would doubt- 
less have added it to his capital, enlarging his 
operations, or he would have loaned it to some 
one wishing to borrow capital. In either case it 
would have been employed in increasing the 
productiveness of the country and increasing the 
demand for labor. 



GOYERNMEKT EXPENDITUEE. 137 

The oflScers of government should be paid 
salaries that will secure the men competent to 
fill the different offices. The services of such 
men as Georofe Washinoion and John Marshall 
would be cheap at any price. Such salaries 
should be paid as will secure the services of the 
best men. 

All government expenditure should be carefully- 
watched by the people. The public funds 
should be intrusted to such men as will use them 
as carefully as they use their own. Public 
works ought to be done by the government at as 
little cost as they would be done by individuals. 
Excessive profit by contractors is simply robbing 
the people. The idea that profuse expenditure 
by the government is beneficial to the country 
ought to be abandoned by all. All that the 
government expends must first be taken from 
the people. It is often taken from productive 
industry and unproductively consumed. 

A portion of government expenditure should 
be used in promoting the cause of education. 
A certain degree of intelligence is necessary in 
order to enable one to discharge the ordinary 
duties of a citizen. The existence of a govern- 
ment of law and the prosperity of a nation de- 
pend, in a good degree, on the intelligence of 
the people. If, then, it is the duty of govern- 
ment to promote good government and national 
prosperity, it is its duty to foster education. It 
should place the elements of a good education 
within the reach of every one. 

Its first and chief duty with respect to educa- 



138 POLITICAL ECOiq-OMY. 

tion is to make provision for tlie education of 
the masses, so far as to enable them to perform 
tlieir duty as citizens. When tlie rich are taxed 
for the education of the poor, they are taxed to 
render their own property more secure and their 
business operations more prosperous. 

The government should also foster institutions 
for higher education — institutions for the ad- 
vancement and diffusion of science. Men of 
higher culture are needed to give direction to pub- 
lic sentiment and reflect credit on the country. 
Experience has shown that such men usually 
come from our higher institutions of learning. 
Most of the discoveries of science are made by 
men trained in our higher institutions. The 
pecuniary benefit of such men to the country is 
incalculable. 

It would require volumes to describe the con- 
nection between science and industrial success. 
A single paragraph in relation to one depart- 
ment of science will ba given from Herbert Spen- 
cer. He remarks that " Physics joined with 
mathematics have given us the steam-engine, 
which does the work of millions of laborers. 
That section of physics which deals with the 
laws of heat has taught us how to economize 
fuel in our various industries ; how to increase 
the produce of our smelting furnaces by substi- 
tuting the hot for the cold blast ; how to venti- 
late our mines ; how to prevent explosions by 
using the safety-lamp ; and, through the ther- 
mometer, how to regulate innumerable processes. 



GOVERKMEKT EXPEKDITUEE. 139 

*' That division which has the phenomena of 
light for its subject gives eyes to the old and the 
myopic, aids through the microscope in detect- 
ing diseases and adulterations, and by improved 
lighthouses prevents shipwrecks. 

' ' Researches in electricity and magnetism 
have saved incalculable life and property by the 
compass ; have subserved sundry arts by the 
electrotype ; and now, in the telegraph, have 
supplied us with the agency by which, for the 
future, all mercantile transactions will be regula- 
ted, political intercourse carried on, and perhaps 
national quarrels often avoided. 

' ' In the details of indoor life, from the im- 
proved kitchen-range up to the stereoscope on 
the drawing-room table, the applications of ad- 
vanced physics underlie our comfort and our 
gratifications. ' ' 

Thus we see from a brief glance at a single de- 
partment, how close is the connection between 
the advancement of science and industrial suc- 
cess. 

Questions. 

1. How much ought to be expended for support 
of the government ? 

2. Why do some think it to be of little conse- 
quence how much the government expends ? 

3. What erroneous notion appears in the remark ? 

4. What is true of all expenditure beyond what is 
necessary to secure good government ? 

5. From what is the money taken ? 

6. Give an example. 



140 POLITICAL ECOKOMY. 

7. What salaries should government oificials re- 
ceive ? 

8. What is said of the services of such men as 
Washington and Marshall ? 

9. Why should government expenditure be watch- 
ed by the people ? 

10. To whom should public funds be intrusted ? 

11. At what cost should operations be carried on 
by the government ? 

12. What is said of excessive profits on the part of 
contractors ? 

13. What is the next object of government expen- 
diture mentioned ? 

14. Why is it the duty of government to provide 
education for the masses ? 

15. What is said of institutions for higher educa- 
tion ? 

16. What has experience shown ? 

17. What does the extract from Spencer show ? 



CHAPTER XXIX. 

STOCKS. 

When a company is formed for conducting 
some business for profit, the capital is divided 
into portions called shares. For example, the 
capital may be $100,000 and may be divided into 
1000 shares of $100 each. The shares are dis- 
tributed among the members of the company. 
If the capital is divided into shares of one hun- 
dred dollars, the members pay one hundred dol- 
lars for every share they take. For every share 
thus purchased, the purchaser receives a certifi- 
cate of ownership. The holders of these certifi- 
cates are called stockholders, and have power in 
the management of the company in proportion 
to the number of their shares. These certificates 
are called stocks. They are bought and sold like 
other things. 

Of this nature are bank stocks, insurance 
stocks, railroad stocks, mining stocks, govern- 
ment stocks, and various other kinds. 

There is a difference between government 
stocks and other stocks. The holders are not 
members of a governmental stock society. They 
are simply creditors of the government. 

Suppose a government borrows one hundred 
thousand dollars, and issues certificates to the 



142 POLITICAL ECONOMY. 

lenders for the sums lent. These certificates of 
government indebtedness are called bonds, and 
are of various denominations to suit the conveni- 
ence of the lenders. These denominations may- 
vary from $10,000 or more to $50. 

The value of stocks in market depends on the 
dividends or income they afford, their security, 
and the prospect of continued dividends prompt- 
ly paid. 

If a man has stock in a company which pays 
seven dollars annually on each share of one hun- 
dred dollars, and the prospect is good that it 
will continue to pay seven dollars a year, the 
share will be worth in market at least one hun- 
dred dollars. If the capital of the company has 
been wisely invested, and its affairs are skilfully 
managed, its stock will be high in market. The 
stocks of some companies are so valuable that 
they can seldom be bought. Those who hold 
them value them too highly to part with them. 
Such stocks are not quoted in the reports of sales. 

When a share which originally cost one hun- 
dred dollars, or when a certificate of ownership 
of a share for one hundred dollars will sell for 
one hundred dollars, it is said to be at par. If 
it will sell for more than one hundred dollars, it 
is said to be above par. If it will sell for one 
hundred and ten dollars, it is said to be ten per 
cent above par. If it will not sell for one hun- 
dred dollars, it is said to be below par. 

Some stocks which pay large dividends are not 
high in market on account of their uncertainty 
and risk. 



STOCKS. 143 

The value of government bonds depends upon 
the rate of interest and the security and perma- 
nence of the investment. When capitalists can 
loan their money for a long period and have per- 
fect confidence in the ability and integrity of the 
government borrowing, they will be satisfied with 
a low rate of interest. England can borrow for 
three per cent, because no act of the government 
has tended to impair its credit. Lenders have 
perfect confidence that England will promptly 
meet all her pecuniary engagements. It is for 
the interest of nations as well as of individuals 
to be honest. 

The value of different stocks fluctuates from 
time to time — being at one time higher and at 
another lower. When dealers think that a cer- 
tain stock will rise, they will purchase in order 
to sell at an advanced price. 

It is said, and no doubt truly, that sometimes 
secret measures are taken to elevate or depress 
certain stocks for the benefit of those concerned. 
A false report may be spread which may de- 
press certain stocks two or three per cent or 
more. The operators purchase a large quantity 
of the depressed stock. As soon as the report 
is known to be false, the stock rises to where it 
was before the report. The operators then sell 
out, and make a profit proportioned to the fac- 
titious depression. 



144 POLITICAL ECON"OMY. 



Questions. 

1. How is tlie capital of a company commonly di- 
vided ? 

2. How are the shares distributed ? 

3. How much is commonly paid for a share of 
$100? 

4. What do the shareholders receive for the money 
paid? 

5. What power does this give them ? 

6. What are these certificates called ? 

7. What takes place in regard to them in market ? 

8. Mention several kinds of stocks. 

9. Show wherein government stocks differ from 
other stocks ? 

10. What are government certificates of indebted- 
ness called ? 

11. What is said of their denominations ? 

12. On what does the value of stocks in market de- 
pend? 

13. When are they said to be at par ? 

14. When above par ? 

15. When below par ? 

16. On what does the value of government bonds 
depend ? 

17. What nations can borrow at a low rate of in- 
terest ? 

18. What is said of the fluctuation of stocks ? 

19. What measures are sometimes taken to cause 
fluctuation ? 



CHAPTER XXX. 

BILLS OF EXCHANaE. 

A New York merchant sends a cargo of flour 
to London, and sells it to a London merchant for 
$5000. The London merchant owes the New 
York merchant $5000. 

A London merchant sends a cargo of English 
goods to New York, and sells them to a New 
York merchant for $5000. The New York 
merchant owes the London merchant $5000. 
To save the trouble and expense of sending the 
money across the Atlantic in each case, let the 
London debtor pay the London creditor $5000, 
and the accounts are settled. The New York 
merchant can send his debtor in London an 
order to pay $5000 to the London creditor of 
the New York debtor. Such an order is called a 
bill of exchange. 

By the use of bills of exchange, the necessity 
of sending money from one country to another is 
in a great measure avoided. 

Mr. A. wants to pay a debt in London. He 
goes to Mr. B. , who has money due him in Lon- 
don, and gets an order, a bill of exchange on 
London. He can afford, and is willing to pay 
for the bill. If he could not get a bill, he would 
have to send over the coin. He is willing to 



140 I'OLITJdAI. ECONOMY. 

]);iy for a l)ill hh Triiicli, ni Icjist, us it would coHt 
jiiiii to Hciid tlio coin. 

I'lic, (lucHtion boforo liim in, *' Will it 1)0 
di(\'i|)cr .'1)1(1 more convcnioiit for mo to Luy a 
hill of oxch.'iii^c tliutj to Hcud tlio inoncy ?" If 
Jk; oaimot buy a ])ill for what it will cost liini to 
Hoiid tlio inoiKsy, ho will not buy it. 

IJilJH of (!xcliaiiuj(! aro so convoiiioiit for busi- 
ii(!HH {)Mrj)osoH tliat tlicy an; l^(',j)t for sahi. 'J'lK'y 
fiiniiKli a iiioHt coiiV('-ni(M)t way of adjustiti<i; <\v\>iH 
botwccti dist.'iiit ])lac,(!H. 'I'ln'y diH))ons(; with tlio 
iiHO and tin; tnuisiuission of lar^o ainounlH of 
nioncy. 

WluiU tlio ^(Hxh ])ur(;lia.scd by London in 
Now York and tho floods purcliasod by Now 
York in London aro o(|ual in vahn;, tho bills 
diawn by London on Now York will bo <!(|ual in 
amount to tlio bills drawn by Now York on Jv(jn- 
(lon. It will oost as nnioli to buy in London a 
])ill on Now York as it will cost to buy in Now 
York a bill on Jjondon. Wlion this stato of 
tliinj.?H exists, (ixolian^o is said to Ix; at par. 

Now supjjoso Now York bas bought twio(^ as 
itiucli of liondon as London lias boiij^lit of Now 
Yorl<. 1\vioo as ni.'iny bills an; WMiitod on Lon- 
don as tli(!ro ar(5 wjuitcsd on Now York. Tlioro 
will bo a ooni])otition arnonj^ buyers of bills on 
Loncbm, and tlio [)rioo of bills will ris(!. Sup- 
pose tli(;y rise to two y)or oent, so that ;i. bill for 
$100 costs 1 102. Ex(5hanfro is said to bo two [)or 
cent in favor of London, or two por cent against 
N(;w York. 

Wlion tlio oxoliango is against a country, it in- 



iJiLF.M OK r:x(!irANaK. M7 

(IJf'.'ilfH lli.'ii tli(5 cxcliarif^ci of r,otrirno(liii(!H ho- 
i\V('(!ii tlic. two (;oijjitri(!H Iihh not l)(;<(n (u^w.i] — tliut 
a (Icht li.'iH l)(;(;n couir.icU'A \>y Um; <;oinilry 
,'i;L!;HiiiHt vvliirJi iUc. (ixcliarj^c; lias turned. Jl* tlic; 
iinfavorahlo (jxcluui^c; ootitlriiKiH for any comulcs- 
aldc, l(!njrtli of tiriKj, ^old will he, H(!nt from tlio 
(l(!l)tor to tlic creditor till ihc par of (ixcluuigo is 
nistonid, 

TIh; par may Ix; n^slorcd williout Kcndiriir 
^^old from a country. 'lUa N(!W York mcr- 
<'.liarit instead of HcrMliiifr gold to London may 
send goods to I'aris or Honn; otlnT })Ia(M', and h('I1 
tlicm for goM and .s(!nd tlic. gold to I>ondon, or 
lie may Hcnd tlic creditor a hill on I'ari.s. 

" When tli<i rat(!H of (!x<',liang(! were first cs- 
tal)lislie<l l)ctwc(!n Piiigland and the United Statcts, 
tlic jioiind st(!rling was nickoncd as c(|iial to 
$•1.44 of our money. Since then the weight and 
iinencKH of our gold coins liavc hccn rc(hiced, 
and the; r(%'il par of exchange Ih one pound for 
$'i.Hl. T\w, old nominal par, liowever, remains 
UK th(^ standard, so that tin; exchange is really at 
par wluMj it stands in tli<'. (piotations as 10!).^, or 
\}S jx'r <'eiit al)ov(! [lar. "^' 

in ord(!r that, hills may hn drawn on ;i fon^gn 
country, it is not inuM-ssary that jicrsons in that 
(country he in deht t-o persons in the country 
whence th(^ hills an; <lravvn. Arrang(unents may 
l)(! made h(;tw(M>.n individuals or (inns in those 
connt,ri(!S to draw hills on (;acli other, with the 
understanding that they are in all cases to he 
honored. 

^ Vvrry. 



148 POLITICAL ECOKOMY. 



Questions. 

1. Explain what is meant by a bill of exchange. 

2. What is saved by the use of bills of exchange ? 

3. Suppose a man wants to pay a debt in Loudon ? 

4. Why is he willing to pay for such an order ? 

5. When will he send money instead of a bill ? 

6. What advantages have bills of exchange ? 

7. When will the debts between two countries be 
equal ? 

8. What will then be true of the bills drawn ? 

9. When is exchange said to be at par ? 

10. When is exchange said to be against a country ? 

11. What does an unfavorable exchange indicate ? 

12. What will take place if it continues long ? 

13. In what other way may the par of exchange be 
restored ? 

14. What was the pound sterling reckoned as 
equal to ? 

15. What has since taken place ? 

16. What is the pound now equal to ? 

17. Why is exchange with England really at par 
when quoted 9i per cent above par ? 

18. Are bills of exchange always based on debts 
due from one country to another ? 

19. What arrangements are often made ? 



CHAPTER XXXI. 

COMMERCE. BALANCE OF TRADE. 

The products of one country are exchanged 
for those of other countries. This is owing to 
the fact that one country has not the capabihties 
for producing all that it wants. Canada wants 
oranges, and finds it cheaper to buy them in the 
West Indies than to produce them in hot-houses. 
No nation will exchange its products for those of 
another nation unless it wants those products, and 
unless it is cheaper to get them by exchange in- 
stead of producing them. The nation A. will not 
carry on trade with nation B, unless it finds it 
profitable to do so, and B. will not carry on trade 
with A. unless it finds it profitable to do so. 
Commerce is thus profitable to both parties. 
Both parties gain by a just commerce. 

Men of other times held very erroneous no- 
tions respecting commerce. In consequence, 
they did many unwise things. They thought 
that only one party could gain by commerce — 
that what was one nation's gain was another 
nation's loss. Hence they were anxious to se- 
cure for their own nation the gains which it was 
thought could accrue to only one of the parties 
engaged in commerce. 



150 POLITICAL ECONOMY. 

For this reason obstructions were often thrown 
in the Avay of a profitable commerce. 

Those entertaining the idea that what was 
one country's gain was another country's loss 
soon came to think that what was one country's 
loss was another country's gain. This led to 
efforts to lessen the prosperity of other nations. 

It is now understood that both parties gain by 
a wise and just commerce. It is now under- 
stood that it is for the interest of one nation that 
all other nations should be prosperous. It is 
with nations as with individuals. They want 
customers who are able to pay for what they 
buy. 

If a shopkeeper establishes himself in a village, 
it is for his interest that the people around him 
should be prosperous. The richer they are, the 
more they will buy of him, and they will pay 
for what they buy. He would work against his 
own interest if he labored to obstruct the pros- 
perity of the farmer, the blacksmith, and his 
other customers, under the impression that the 
less they had the more there would be for him. 

In former times it was thought that the most 
profitable commerce was that which brought the 
most money into the country. Many nations 
favored, by bounties and special privileges, the 
commerce which brought money into the coun- 
try in exchange for exports. They laid heavy 
restrictions on the commerce which took money 
out of the country, no matter what it brought in. 
A large amount of the legislation of former 
times proceeded on the assumption that the 



COMMERCE. — BALAKCE OF TRADE. 151 

great end of commerce was tlie accmnulation of 
the precious metals. 

The influence of that exploded notion is some- 
times seen in our halls of legislation. 

The balance of trade, — Few errors have wrought 
greater financial mischief than the doctrine of 
the balance of trade. " By an unfavorable bal- 
ance of trade, ' ' says Daniel Webster, ' ' I under- 
stand is meant that state of things in which im- 
portation exceeds exportation. To apply it to 
our own case, if the value of goods imported ex- 
ceed the value of those exported, then the bal- 
ance of trade is said to be against us, inasmuch 
as we have run in debt to the amount of this 
difference. Therefore it is said, that, if a na- 
tion continue long in a commerce like this, it 
must be rendered absolutely bankrupt. It is in 
the condition of a man that buys more than he 
sells ; and how can such a traffic be maintained 
without ruin ? Now, sir, the whole fallacy of 
this argument consists in supposing that when- 
ever the value of imports exceeds that of exports 
a debt is necessarily created to the extent of the 
difference ; whereas, ordinarily, the import is no 
more than the result of the export, augmented in 
value by the labor of transportation. The ex- 
cess of imports over exports, in truth, usually 
shows the gains, not the losses, of trade ; or, in 
a country that not only buys and sells goods, but 
employs ships in carrying goods also, it shows 
the profits of commerce and the earnings of navi- 
gation. 

'* Allow me, sir, to give an instance tending 



152 POLITICAL ECONOMY. 

to show how unaccountably individuals deceive 
themselves, and imagine themselves to be some- 
what rapidly mending their condition, while 
they ought to be persuaded that, by that infalli- 
ble standard, the balance of trade, they are on 
the high road to ruin. Some years ago, in better 
times than the present, a ship left one of the 
-towns of New England with 70,000 specie dol- 
lars. She proceeded to Mocha, on the Red Sea, 
and there laid out these dollars in coffee, drugs, 
spices, and other articles procured in that mar- 
ket. With this new cargo she proceeded to 
Europe ; two thirds of it were sold in Holland 
for $130,000, which the ship brought back and 
placed in the same bank from the vaults of which 
she had taken her original outfit. The other 
third was sent to the ports of the Mediterranean, 
and produced a return of $25,000 in specie, and 
$15,000 in Italian merchandise. These sums 
together make $170,000 imported, which is 
$100,000 more than was exported, and is there- 
fore proof of an unfavorable balance of trade, to 
that amount, in this adventure. We should find 
no great difficulty, sir, in paying off our balances 
if this were the nature of them all.'^ 

Questions. 

1. "Why do nations exchange products ? 

2. What example is given ? 

3. When will a nation exchange products with an- 
other nation ? 

4. To which party is a just commerce profitable ? 



COMMERCE. — BALAKCE OF TRADE. 153 

5. "What erroneous notion is mentioned ? 

6. To what efforts did it lead ? 

7. What other erroneous idea is mentioned ? 

8. To what did it lead ? 

9. What is now understood respecting commerce ? 

10. State the analogy between individuals and na- 
tions with respect to trade. 

11. What was formerly thought to be the most 
profitable commerce? 

13. On what error w^as that notion founded ? 

13. To what did it lead ? 

14. What is meant by the balance of trade ? 

15. Give Mr. Webster's statement. 

16. In what does the fallacy consist ? 

17. What do the excess of imports over exports 
usually show ? 

18. State the facts given in illustration. 



FINIS, 



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ABBOTT (Jacob). Gentle Measures in the Man- 
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York. 25 

Alexander (S. D.) Princeton College during the 
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Arnold (M.) A French Eton ; or Middle-Class 
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of Holland. 8°. London. 4 20 

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Literature and Dogma. 12**. N.York, i 50 

God and the Bible. 120. New York, i 50 

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A Short System of Polite Learning. Being 
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Per volume, 4 $0 

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1845-48, 3 vols. 3 75 

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National Education : General and Special. 

10 vols. 

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many, 1 87 1. 856 pages. 5 S*^ 

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Barnard (H.) National Pedagogy and Library 
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the best Methods of Reading, Manners and the Art 
of Conversation, the Acquisition and True Uses of 
Wealth, and the Conduct of Life generally. 564 
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3 SO 

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Bates (Samuel P.) Lectures on Mental and Moral 
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Beecher (Catharine E.) Educational Reminis- 
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Physiology and Calisthenics in Schools and 

Families. Over 100 illustrations. 160. N. Y. i 00 

Belding (Pamelia). Infant-Class Manual. i8». 
New York. 75 

Bible in the Public Schools (The). Argu- 
ments in the case of John D. Minor et al. v. The 
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See Library of Education. 



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Blackie (John Stuart). On Sell-culture, Intel- 
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Bower (A.) The History of the University of 
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Brace (Chas. L.) The Dangerous Classes of New 
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Bradford (W. H.) The Thirty Problems of Per- 
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Bridges (F.) Hints to Mothers on Home Educa- 
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Bristed (Chas.' A.) Five Years in an English 
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Brown (Goold). Grammar of English Gram- 
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Burton (W.) The Culture of the Obsen^ing Fac- 
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California, History of the Public School 
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Clarke (E. H.) Sex in Education ; or, a Fair 
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Corson (Hiram). Elocutionary Manual. Phila- 
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COUTIE (Geo.) The Education of Boys for Busi- 
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Cyclop/Edia of Education (The). Edited by 

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Dall (Caroline H.) The College, the Market, 
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Davies (Emily). The Higher Education of Wom- 
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Day (H. N.) The Science of Esthetics ; or the 
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Deaf and Dumb. See Latham, Reet, Scott. 

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A.M. 160. I 50 

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De Tocqueville (Alex.) American Institutions. 
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Diaz (Mrs. A. M.) The School-master's Trunk. 
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Dickens (Chas.) Schools and School-masters. 
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Dialogues and Dramas for School and 

Home. 120. New York. i 50 

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Donaldson (John Wm.) Classical Scholarship 
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2 GO 



DOUAI (A.) A Reform of the Common English 
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DUFFEY (Mrs. E. B.) No Sex in Education; or, 
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Review of Dr. Clarke's "Sex in Education." 160. 
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Duncan (A1.) The Examiner ; or Teacher s Aid. 
Designed to assist Candidates for Teachers' Certifi- 
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Dunn (H.) Principles of Teaching. 12". Lon- 
don. . ^ 75 

DUPANLOUP (Monseigneur). The Child. Trans- 
lated, with the author's permission, by Kate Ander- 
son, 120. Boston. \ 5^ 

DwiGHT (B. W.) Higher Christian Education. 
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EDGEWORTH (R. L. and Maria). A Treatise 
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Edison (J. S.) Legitimate System of National 
Education. 80. London. , -r^ ^ ^^ 

Education in Ireland. Thirty-seventh Report 
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land. With Appendices. 80. Paper. Dublin, i 75 

Education in Japan. A Series of Letters ad- 
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Japanese Minister. I2». New York. I 50 

Educational Year Book. 1873. 12^ New 
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Eggleston (G. C.) How to Educate Yourself. 
A complete Guide to Students, showing how to Study, 
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York. ^ ^ .75 

Ellis (W.) Education as a Means of Preventing 
Destitution. 8". London. I 60 



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tilation. 4". New York. 6 oo 

Everett (Edward). Importance of Practical Ed- 
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Examiner (The), or Teacher's Aid. 12°. Cin- 
cinnati. $0 

FARRAR (F. W.) Essays on a Liberal Educa- 
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Fearon (D. R.) School Inspection. 12". Lon- 
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FiCHTE (J. G.) On the Nature of the Scholar and 
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The Vocation of the Scholar. 12". Lon- 
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Fitch (J. G.) Art of Questioning. i6<'. Paper. 

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Five Hundrbd Mistakes of Daily Occurrence in 

Speaking, Pronouncing and Writing the English Lan- 
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■^LETCHER (Matilda). Practical Ethics for Schools 

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Forrester (A.) The Teacher's Text-book. 8". 

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Foster (J.) On the Evils of Popular Ignorance. 

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FOWLE (W. B.) The Teachers' Institute; or, 
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Frankland (Ed.) How to Teach Chemistry. 
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ROBISHER (J. E.) Selected Readings, Serious 
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Paper, 0.25 ; boards, 50 

Fry (Herbert). Our Schools and Colleges, giving 
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Fuller (Thos.) The History of the University 
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FURNIVALL (Fr. J.) Education in Early England. 
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GARVEY (M. A.) A Manual of Human Culture. 
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Gill (John). The Art of Teaching Young Minds 
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GiLMORE (J. H.) Outlines of the Art of Expres- 
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Gow (A. M.) Good Morals and Gentle Manners 
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Grant (Horace). Exercises for the improvement 
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Grey (Mrs. Wm.) Paper on the Study cf Educa- 
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Gross (Magnus). Languages and Popular Edu- 
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guages.]) 120. Paper. New York. 30 

Grosser (W. H.) Illustrative Teaching. 18". 
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HAILMAN (W. N.) Outlines. A System of 
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Hall (Rev. John.) Familiar Talks to Boys. 120. 
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Hamilton (Richard W.) The Institutions of 
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Hart (J. S.) In the School-room ; or, Chapters 
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Mistakes of Educated Men. 18°. Phila- 
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Harvard Examination Papers. 12°. Bos- 
ton. I 50 

Hazen (W, B.) The School and the Army in 
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Heberden (W.) On Education. A Dialogue 



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Hecker (John). The Scientific Basis of Educa 
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Mental Phenomena and the Office of the Holy Spiri* 
in the Processes of the Mind, in a Series of Letter? 
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New York. Second edition. 8°. New York. 2 5c 

Hiatus: The Void in Modern Education. It? 
Causes and Antidote, by Outis. S°. London. 3 00 

Hill (Florence). Children of the State ; the Train- 
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Hill (Rev. Thomas). The* True Order of Studies. 
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New York. I 50 

Hittell Qohn S.) A Brief History of Culture. 
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HOARE (Mrs. Sam'l). Hints on Early Education, 
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'HODGINS (J. G.) The School-house : its Architec- 
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HODGSON (W. B.) The Education of Girls, and 
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HOLBROOK (Alfred). School Management. 12*. 
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The Normal ; or, Methods of Teaching the 

Common Branches. 120. New York. I 50 

Hooper (E.) Our Nurseries and Schocl-rooms : 
Being remarks on Home Training and Teaching, 
specially for Ladies engaged in Tuition. Cio\^n8o. 
London. 75 



HOOSE (J. H.) Studies in Articulation : a Study 
and Drill Book in the Alphabetic Elements of thf 
English Language. 1 60, Syracuse. 5c 

• Notes on the Departments of Public In- 
struction in England and Scotland. 16". Syracuse. 15 

Hope (A. R.) A Book about Boys. 16°. Bos- 
ton. 75 

A Book about Dominies. 16". Boston. 75 

Howe (Julia Ward). Sex and Education. A Re- 
ply to Dr. Clarke's "Sex in Education." 160. Bos 
ton. I 25 

HOYT (John W.) University Progress. 8". New 
York. 2 oc 

Hurst (J. F.) Life and Literature in the Father- 
land. The result of four years' professional residence 
in Germany, and describes fully German Domestic 
and Social Life ; the Schools, Universities, and Gen 
eral Educational Features of the Country. S®. New 
York. 2 25 

INFANTRY Tactics for Schools. N. Y 75 

JEAN PAUL. Levana; or, the Doctrine of Edu- 
cation. Boston. 2 oc 

Jewell (F. S.) School Government. A Practical 
Treatise presenting a Thorough Discussion of its 
Facts, Principles, and their Applications ; with Crit- 
iques upon Current Theories of Punishment, and 
Schemes of Administration. 12*'. New York. I 50 

Jex-Blake (Sophia). A Visit to some American 
Schools and Colleges. 8". London. I 75 

JOHONNOT Q.) Our School-houses. Containing, 
(i) An Exposition of the Faults of Sthool-houses, (2) 
An analysis of the Needs of Modern Schools, (3) 
About fifty Plans, (4) A simple system of Ventilation, 

(5) Admission of Light and other Sanitary Conditions, 

(6) Arrangement of Grounds, etc., (7) School Furni- 
ture, (8) Apparatus, (9) System for grading Country 
Schools, (10) Conduct and Management of Schools. 
Illustrated. 8<'. Syracuse. 2 oc 

Jolly (S.) Harmony of Education. 12°, Lond. 8c 

Thoughts on Vocation and Progression of 

the Teacher. 120. London. 6q 



KAY (J.) The Social Condition and Education 
of the People in England. 12°. New York. I 50 

Kennedy (H. A.) The Heart and the Mind. 
True Words on Training and Teaching. 120. Lon- 
don. 75 

Kennedy (J.) Philosophy of School Disciphne. 
160. Syracuse. 25 

Kiddle (H.), Harrison (T.), and Calkins (N. A.) 

How to Teach. A Manual of Methods for a Grade 
Course of Instruction ; embracing the Subjects usuall 
pursued in Primary, Intermediate, Grammar, an 
High Schools ; also suggestions relative to Discipline 
and School Management. For the use of Teachers. 
1 20. New York- i 25 

KiNGSLEY (Chas.) Health and Education. 12°. 
New York. I 75 

Kriege (Matilda H.) Friederich Froebel. A Bi- 
ographical Sketch. 12®. New York. 50 

Krusi (H.) Pestalozzi: His Life, Work and In- 
fluence. 8<J. Cincinnati. . 2 25 

LANCASTER (Joseph). Improvements in Edu- 
cation, as it respects the Industrial Classes of the 
Community ; containing, among other important par- 
ticulars, an account of the Institution for the Educa- 
tion of One Thousand Poor Children, Borough Road, 
Southwark ; and of the New System of Education on 
which it is conducted. S'^. London, 1805. 2 00 

Latham (Wm. H.) First Lessons for Deaf Mutes. 
i&>. Cincinnati. 30 

Laurie (S. S.) Primary Instruction in relation to 
Education. 12". London. I 50 

Leighton (R. F.) Harvard Examination Papers, 
collected and arranged. 12c. Boston. I 56 

Leitch (James). Practical Educationists and their 
Systems of Teaching. 12°. Glasgow. 2 40 

Lessing (G. E.) The Education of the Human 
Race. Translated by F. W. Robertson. iS". Lon- 
don. I 00 

Lessons on Objects, as g-iven to Children be- 
tween the Ages of Six and Eight, in a Pestalozzian 



School at Cheam, Surry. From the twenty-second 
London edition. 12°. San Francisco. i 75 

Le Vaux (G. V.) The Science and Art of Teach- 
ing. 120. Toronto. I 25 

Library of Education. Selected from the best 
writers of all countries. Vol. I : Some Thoughts 
concerning Education, by John Locke. Vol. 2 : Some 
Thoughts concerning Education, by John Locke ; part 
2, and a Treatise on Education, by John Milton. 
Vol. 3 : The Study of Physiology in Schools, by Hor- 
ace Mann. Vol. 4: Scottish University Addresses, 
by John S. Mill, James A. Froude, and Thos. Car- 
lyle. Vol. 5 : The Bible in the Public Schools, from 
the press, etc. Vol. 6: The same, part 2. 180. Pa- 
per. Syracuse. Each, 25 

LiLLiENTHAL (M. E.) and Allyn (Robt.) Things 
Taught : Systematic Instruction in Composition and 
Object Lessons. 160. Cincinnati. 25 

LOOMIS (L. C.) Mental and Social Culture, for 
Teachers, Schools, and Families. In Fourteen Chap- 
ters. Adapted for use as a reading book. 120. New 
York. 75 

Lord (John). Life of Emma Willard. 120. New 
York. 2 00 

Lowe (R.) Primary and Classical Education. 
An Address. 80, Paper. Edinburgh. 50 

MACBRAIR (R. M.) Chapters on National Edu- 
cation. 80. London. 50 

MaCLAREN (Archibald). A System of Physical 
Education, Theoretical and Practical. With illustra- 
tions. 16". Oxford. 2 25 

Mandeville (Henry). Elements of Reading and 
Oratory. 80. New York. I 50 

Mann (Horace). Annual Reports on Education 
from 1839 to 1848. Crown 8°. 770 pages. Cloth. 
Boston. 3 00 

Lectures and Annual Reports on Education. 

Crown 80. 584 pages. Cloth. Boston, 3 00 

Thoughts selected from the Writings of 



Horace Mann. 16". 240 pages. Cloth. Bost. I 25 



Mann (Mrs. Horace). The Life of Horace Mann. 
Crown 80. Boston. 3 00 

• Education by Work, according to Froebel's 

Method. Translated from Bertha Von Marenholz- 
Bulow. 12°. Camden. i 00 

Mansfield (E. D.) American Education: Its 
Principles and Elements. Dedicated to the Teachers 
of the United States. 120. New York. I 50 

Markby (Rev. Thos.) Practical Essays on Edu- 
cation. 12". London. 2 00 

Martineau (Harriet). Household Education. 
16°. Boston. I 25 

Mathias (G. H. D.) A Tutor's Counsel to his 
Pupils. 1 20. Philadelphia. I 00 

Maudsley (H.) Sex in Mind and Education. 
16". New York. 25 

Maurice (F. D.) Representation and Education 
of the People. Chapters from EngHsh History. 
Crown 8°. Paper. London. 75 

Learning and Working. Six Chapters on 

the Foundation of Colleges for Working Men. 80. 
London. 2 50 

Mayhew (Ira). Universal Education : Its Means 
and Ends. 12". New York. I 75 

Mayo (Miss and Dr.) Practical Remarks on In- 
fant Education, 120. London. 50 

Mayor (J. B.) Guide to the Choice of Classical 
Books. 120. London. i 00 

Menet (J.) Practical Hints on Teaching. Con- 
taining Advice as to Organization, Discipline, Instruc- 
tion, and Practical Management. With plans of 
Schools which have heen thoroughly Tested, and are 
now being thoroughly Adopted in various Localities. 
120. London. I 25 

Miller (Hugh). My Schools and School-masters. 
1 20. New York. i 50 

More (Hannah). Strictures on the Modem System 
of Female Education ; with a View of the Principles 
and Conduct prevalent among Women of Rank and 
Fortune. 2 vols. 120. London, 1799. 2 25 



MORLEY (J.) Struggle for National Education. 8». 

London. I 20 

Morse (E. S.) First Book of Zoology. 12". New 

York. I 25 

MULLER (M.) Public School Education. 12°. 

Boston. I 50 

NASH (Simeon). Crime and the Family. 12". 

Cincinnati. I 25 

National Educational Association. Pro- 
ceedings and addresses for 1872, 3, 4, 5, 6 and 7. 8". 
Cloth. Each, 2 00 

Newman (Dr. John Henry). Idea of a University ; 
considered in Nine Discourses, Occasional Lectures, 
and Essays. Crown 8°. London. 2 80 

New York City. An Account of the Free School 
Society of New York. 80. 1 8 14. Very rare. 5 00 

'■ Public Education in its History, Condition 

and Statistics. An Official Report to the Board of 
Education, by Thomas Boese, CJerk of the Board. 
8". New York. 3 00 

History of the Pubhc School Society of, with 

Portx-aits of the Presidents of the Society, by Wm. 
Oland Bourne, A.M. 8°. New York. 6 00 

New York State. See Randall (S. S.), Regents' 
Questions. Regents' Reports. 

Natural History. This magnificent work, 

which gave to the world the nomenclature now every- 
where adopted, is now rare. It consists of 22 vols. 
Zoology, 5 vols., (Mammals I, Reptiles and Fishes 2, 
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Paleontology, 5 vols. The set contains several thou- 
sand plates, nearly half of them colored by hand, and 
cost the State more than $500,000. We have several 
sets on hand, at from $60 to $100, and single volumes 
at from $2.00 to $15.00. 

Northam (H. C.) Civil Government for Common 
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Constitution of the State of New York, as recently 
amended. 16". Syracuse. 75 



NORTHEND (C.) The Teachers' Assistant; or, 
Hints and Methods in School Discipline and Instruc* 
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ing upon the Teacher's Work. 12°. New York. I 50 

• The Teacher and the Parent: A Treatise 

upon Common School Education ; containing Practical 
Suggestions to Teachers and Parents. 12". New 
York. I 50 

Northrop (B. G.) Education Abroad, and other 
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)GDEN (J.) The Science of Education and Art 
of Teaching. 12°. Cincinnati. I 50 

Oljn (St.) College Life : Its Theory and Practice. 
120. New York. I 50 

Oppler (A.) Three Lectures on Education, de- 
livered before the College of Preceptors. Revised 
and enlarged. 120. London. I 40 

Orcutt (Hiram). Home and School Training. 
120. Boston. I 00 

Teachers' Manual. 12". Boston. i 00 

Orton (J.) The Liberal Education of Women. 
The Demand and the Method. 12°. New York, i 50 

Our Children : How to Rear and Train Them. 
A Manual for Parents in the Physical, Educational, 
Religious, and Moral Training of their Children. 120 
London. I 50 

PAGE (D. P.) Theory and Practice of Teaching. 
1 20. New York. I 50 

Payne (J.) Pestalozzi : The Influence of his Prin- 
ciples and Practice on Elementary Education. 80. 
Paper. London. 25 

^- Froebel and the Kindergarten System. 12°. 

Paper. New York. 15 

The Science and Art of Education. 8". 



New York. 50 

The True Foundation of Science Teaching. 



80. Paper. London. 25 
A Visit to German Schools. Notes of a 



Professional Tour to inspect some of the Kindergarten 
Primary Schools, Public Girls' Schools, and Schools 



for Technical Instruction, in Hamburg, Berlin, Dres- 
den, Weimar, Gotha, and Eisenach, in the Autumn of 
1874, with critical Discussions of the General Princi- 
ples and Pi-actice of Kindergarten and other Schemes 
of Elementary Education. 12^ London. i 80 

Payne (Wm. H.) Chapters on School Supervision. 
A Practical Treatise on Superintendence, Grading, 
Arranging Courses of Study, etc. 120. Cin. I 25 

Peabody (Elizabeth P.) Record of Mr. Alcott's 
School, exemphfying the Principles and Methods of 
Moral Culture. 16°. Boston. I 50 

Peets (H. P.) Course of Instruction for the Deaf 
and Dumb. N. Y. Part i, net, . 75 ; Part 3, net, I 00 

Language Lessons. 12". N. Y. Net, i 25 

Pestalozzi (H.) and His Plan of Education ; be- 
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8". London, 1831. 3 oc 

Letters on Early Education. With Me- 
moir. 12". London, 1850. 75 

See Krusi, Payne, Cullen, Barnard, Quick, 

and Lessons on Objects. 

Phelps (Mrs. L.) The Student ; or, Fireside 
Friend. With an Appendix on Moral and Religious 
Education. 12<». New York. i 50 

Discipline of Life. 120. New York, i 75 

The Educator; or, Hours with my Pupils. 

1 20. New York. I 50 

Phelps (W. F.) The Teacher's Hand-book for 
the Institute and Class-room. 120. New York. I 50 

"Philobiblius." History and Progress of Edu- 
cation, from the Earliest Times to the Present. In- 
tended as a Manual for Teachers and Students. With 
an Introduction by H. Barnard. 12°. N. Y. I 50 

Porter (Noah). Addresses at the Inauguration 
of, as President of Yale College, Wednesday, Octo- 
ber II, 1S71. 8". New York. i 00 

Books and Reading ; or, What Books shall 

I Read, and how shall I Read Them. I2». New 
York. 2 GO 

The American Colleges and the American 



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Potter (Alonzo) and Emerson (G. B.) The 
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of Teachers, Employers, Trustees, Inspectors, etc. 
I a". New York. i 50 

Public Schools (The). Winchester, Westmin- 
ster, Shrewsbury, Harrow, Rugby. Notes of their 
History and Traditions. By the author of " Etoma." 
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PULLEN (P. H.) The Mother's Book; or, Gram- 
mar of English Parsing ; exemplifying Pestalozzi's 
Plan of Awakening the Understanding of Children 
in Language, Drawing, Geometry, Geography, and 
Numbers. Second edition. 12". Lond., 1822. i 25 

QUAIN (R.) On some Defects in General Educa- 
tion. Crown 8**. London. i 25 

Quick (Robert Hebert). Essays on Educational 
Reformers. 12". Cincinnati. 2 oc 

RANDALL (S. S.) A History of the Common 
School System of the State of New York, from its 
Origin, in 1795, to 1871. Including the various City 
and other Special Organizations, and the Religious 
Controversies of 1821, 1832, and 1840. 8°. New 
York. 3 00 

History of the State of New York, for the 

use of Common Schools, Academies, Normal and 
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12*'. Syracuse. I 50 

First Principles of Popular Education and 



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Raub (A. N.) Plain Educational Talks with 

Teachers and Parents. 120. Philadelphia. I 50 

Regents' Questions (The). 1866 to 1876. Be- 
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Regents' Reports on the Academies and Colleges 
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Regents' Reports on the New York Museum of 
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illustrated, forming an appendix to the Natural His- 
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We have complete sets and extra volumes always on 
hand. 

Rhode Island History of Public Education, 1636 
to 1876, Thos. B. Stockwell. S". Providence. 3 00 

RiCHTER Qean Paul Friedrich). Levana ; or, The 
Doctrine of Education. Translated from the German. 
la^. Boston. 2 00 

RiGG (J. H.) National Education in its Social 
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Education, English and Foreign. 17P. London. 4 50 

RiOFREY (A. M. B.) Treatise on Physical Educa- 
tion ; specially adapted to young Ladies. S'*. Lon- 
don, 1838. 2 50 

ROBBINS (Eliza). The Guide to Knowledge ; being 

a Collection of Useful and Familiar Questions and 

Answers on Every-day Subjects. 18**. N. Y. i 00 

Roberts (C. R.) National Education ; with Hints 
to People and Rulers. 8". London. 2 40 

Roe (Martha). A Work in Number, for Junior 
Classes. 16°. Syracuse. 50 

Rogers (Edward). A Guide Book for Parents, 
Teachers, and Scholars, designed as a System of Ethics 
for Common Schools. 16°. Utica, 1849. i 00 

Rogers (J. E. T.) Education in Oxford: Its 
Method ; its Aids, and its Rewards. 8°. Lond. 2 40 

Ronneger (Madame). On Certain Moral and 
Esthetic Deficiencies in the Education of the Present 
Day. Lecture delivered at the College of Preceptors, 
April 15, 1874. London. 20 

Root (N. W. Taylor). School Amusements; or. 
How to make the School Interesting, and hints upon 
the General Management of the School-room. With 
Engravings. 120. New York. I 50 



ROSENKRANZ (Carl). The Science of Education; 
or. Pedagogics as a System. Translated from the 
German by Anna Brackett. S". Si. Louis. 

Paper, $i.oo; cloth I 50 

Ross (Mary Ann). How to Train Young Eyes 
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Parents and Teachers. London. 75 

RoiH (M.) Gymnastic Exercises, according to 
Ling's System, for the due Development and Strength- 
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Russell (J.) Normal Training. 120. N. Y. i 25 

SANDS (Nathaniel). The Philosophy of Teaching. 
The Teacher, the Pupil, the School. 8". N. Y. i oo 

Schmidt (H. L) Education. Part i, History of 
Education, Ancient and Modern ; Part 2, A Plan of 
Culture and Instruction. 18". New York. 75 

SCOONES (W. B.) The Public Schools and the 
Public Service. 8**. London. 50 

Scott (W. R.) The Deaf and Dumb: Their 
Education and Social Position. 8°. London. 3 00 

Sears (Bamas). Ciceronian: or, the Prussian 
Method of Teaching the Elements of the Latin Lan- 
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Senior (N. W.) Suggestions on Popular Educa- 
tion. 80. Half morocco. London. 3 25 

Sewell (E. M.) Principles of Education, drawn 
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Training the Senses and Developing the Faculties of 
Children. I2<». New York. i 75 

Shirreff (Emily). Intellectual Education, and its 
Influence on the Character and Happiness of Women. 
Crown S9. London. 2 40 

Sizer (Nelson). What to Do and Why, and how 



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ents and Temperaments required for Each. 12®. 
New York. I 75 

2jMART (J. H.) The Indiana Schools and the Men 
who have Worked in Them. 12". Cincinnati. I 00 

A Manual of Free Gymnastic and Dumb 

Bell Exercises. 16°. Cincinnati. 20 

Spencer (Herbert). Education, Intellectual, Mor- 
al, and Physical. 1 20. New York. I 25 

Spurzheim (J. G.) Education : Its Elementary 
Principles, founded on the Study of the Nature of 
Man. With an Appendix, containing the Tempera- 
ments and a Brief Analysis of the Faculties. 12". 
New York. i 25 

The Same. S°. London, 1828. 2 00 

Staunton (Howard). The Great Schools of En- 
gland. An Account of the Foundations, Endow- 
ments, and Disciphne of the Chief Seminaries of 
Learning in England. Crown 8**. London. 2 50 

Steffens (Heinrich). German University Life. 
The Story of My Career as Student and Professor. 
With Personal Reminiscences of Goethe, Schiller, 
Schelling, and others. Translated by W. L. Gage. 
120. Philadelphia. I 25 

Stetson (C. B.) Technical Education : What it 
is, and what American Public Schools should Teach. 
An Essay based on the Examination of the Methods 
and Results of Technical Education in Europe, as 
shown by Official Reports. 160. Boston. I 25 

Stone (J.) The Teacher's Examiner. 120. New 
York. I 25 

Stow (David). The Life and Educational Princi- 
ples of. Founder of the Training System of Educa- 
tion. By the Rev. Wm. Eraser. With Portrait. 
Crown 8". London. 2 00 

The Training- System. Moral Training in 

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Stowell (T. B.) Syllabus of Lectures in Physi- 



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Sweet (J.) Questions for Examinations. An Aid 
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Syntax (Dr.) Three Tours of ; in search of (i) 
The Picturesque, (2) Consolation, (3) A Wife. Col- 
ored Illustrations. 120. London. 3 00 

Sypher (J. R.) The Art of Teaching School. 
12°. Philadelphia. I 50 

TATE(Thos.) The Philosophy of Education. I2». 
London. 2 60 

Taylor (I.) Home Education. 8". Lond. 2 00 

Taylor (O. M.) Histoiy of Annapolis and the 
United States Naval Academy. 12°. Baltimore. I 00 

Taylor (S. H.) Method of Classical Study. 120. 
Boston. I 25 

Taylor (W. B. S.) History of the University of 
Dublin : Its Origin, Progress, and Present Condition. 
Colored illustrations. Thick S^. London. Cloth. 
Uncut. 2 50 

Ten Brook (Andrew). American State Univer- 
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Account of the Rise and Development of the Univer- 
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American University System. S^. Cincinnati. 3 50 

Testas (M. F.) Virtues and Faults of Childhood. 
From the French by Susan E. Harris. 12°, Bos- 
ton. I 25 

Thayer's Lectures to a Young Teacher. 

16*'. New York. 50 

Thomas (W. C.) Symmetrical Education ; or, 
The Importance of Just Proportion in Mind and Body. 
Crown 80. London. i 00 

Thompson (D'Arcy W.) Day Dreams of a School- 
master. 12". London. 2 50 
Wayside Thoughts on Education. 120. 
Edinburgh. 2 40 
Thomson (E.) Educational Essays. 12*. New 
York. I 50 



Thornley (M.) True End of Education Devel- 
oped. 120. Edinburgh. I 2$ 

Thring (E.) Education and School. I2^ Lon- 
don. I 75 

TiMBS (J.) School Days of Eminent Men. I2«». 
Cloth. New York. i 5c 

Todd (J.) The Student's Manual. Designed by 
Specific Directions, to aid in Forming and Strengthen- 
ing the Intellectual and Moral Character, and Habits 
of the Student. I2». Northampton. i 75 

TODHUNTER (I.) The Conflict of Studies, and 
other Subjects connected with Education. 8<>. Lon- 
don. 3 50 

Twining (T.) Technical Training : Being a Sug- 
gestive Sketch of a National System of Industrial In- 
struction, founded on a General Diffusion of Practical 
Science among the People. 8°. London. 4 50 

WALSH (McN.) The Lawyer in the School- 
room; comprising the Laws of all the States on Im- 
portant Educational Subjects. Carefully compiled, 
arranged, cited, and explained. In nine chapters. 
12". New York. i 00 

Warren (S. E.) Notes on Polytechnic or Scien- 
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Position, Aims, and Wants. 8®. Paper. N. Y. 40 

Watson's (J. M.) Handbook of Gymnastics. 
With illustrations and music to accompany the exer- 
cises. 80. New York. 2 00 

Manual of Calisthenics. A Complete Course 

of Physical Exercises, without Apparaus. 160. New 
York. I 25 

Welch (A. S.) Object Lessons. Prepared for 
Teachers of Primary Schools and Primary Classes. 
160. New York. i 00 

Welch (F. G.) Moral, Intellectual, and Physical 
Culture; or. The Philosophy of True Living. 120. 
New York. 2 00 

Wells (W. H.) A Graded Course of Instruction 
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New York. " l 25 

Western Literary Institute and College of Pro- 
fessional Teachers. Transactions of Fourth Annual 
Meeting. 8°. Cincinnati, 1835. 2 00 

Whewell (Wm.) Of a Liberal Education in Gen- 
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Studies of the University of Cambridge. 8». Boards. 
London. 2 00 

On the Principles of English University 

Education. 12°. London, 1838. I 25 

Influence of the History of Science upon In- 



tellectual Education. 12°. Paper. Boston. 40 
White (R. G.) Life and Genius of Shakspere. 
12". Boston. 2 50 
Whitcomb (Ida P.) A Summary of History. 
1 20. New York. 5° 
WiCKERSHAM Q. P.) Methods of Instruction ; or, 
That Part of the Philosophy of Education, which 
Treats of the Nature of the Several Branches of 
Knowledge, and the Method of Teaching Them. I2». 
Philadelphia. i 75 
School Economy. A Treatise on the Prep- 
aration, Organization, Employments, Government, and 
Authorities of Schools. 12°. Philadelphia. 150 
WiLLARD (Emma). The Life of, by John Lord. 
12°. New York. 2 00 
WiLLSON (M.) Manual of Information and Sug- 
gestions for Object Lessons, in a Course of Element- 
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and Family Charts, and other aids in Teaching. 1 2°. 
New York. I 5° 
WiLLiN (J.) The Education of the People ; with 
T. P. Nichols's Prehminary Dissertation. 12°. Glas- 
gow. I 50 
Wordsworth (C.) Social Life at the English 
Universities in the Eighteenth Century. 12°. Lon- 
don. 6 00 
Work's New Education according to Froebel s 
Method, by Bertha Von Marenholtz-Bulow. Trans. 



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Prof. Leopold Noa. 16°. 1876. 50 

jfONGE (Miss). Landmarks of Ancient History. 
120. New York. i 00 

• Landmarks of Mediaeval History. 12". New 

York. I 25 

' Landmarks of Modern History. 12^ New 

York. I 50 

YOUMANS (E. L.) The Culture Demanded by 
Modern Life : A Series of Addresses and Arguments 
on the Claims of Scientific Education. Edited with 
an Introduction on Mental Discipline in Education. 
120. New York. 2 00 

YoUMANS (EUza A.) First Book of Botany. De- 
signed to Cultivate the Observing Powers of Children. 
120. New York. I 25 

Second Book of Botany. 12". N. Y. i 50 

SCHOOL REPORTS 

Of all leading States and Cities for many years past 
on hand, for sale or exchange. 

KINDERGARTEN. 
BORSCHITZKY (J, F.) Kindergarten Lieder, with 
German and English words. Containing the 32 Songs 
in Ronge's Guide. Arranged with an accompaniment 
of a second voice and piano-forte guidance. New 
York. 3 50 

Thirty-two Songs from Ronge's Kinder- 



garten Guide, with words in English and German. 
New York. i 75 

New Kindergarten Songs. New York. 50 



CURRIE (James). The Principles and Practice of 
Early and Infant School Education, with an Appendix 
of Infant School Hymns and Songs with appropriate 
Melodies. la**. London. 2 00 

DouAi (Adolt). The Kindergarten. A Manual 
for the Introduction of Froebel's System of Primary 
Education into Public Schools, and for the Use of 
Mothers and Private Teachers. With 16 plates. 
Fourth edition. 120. New York. i 00 



Froebel (F.) The Founder of the Kindergarten 
System. A Biographical Sketch by Matilda H. Kriege, 
with porti-ait. Cloth. New York. 5a 

Reminiscences, by B. Von Marenholz-Bu- 

low. 1 20. Boston. I 50 

The Mother's Book of Song. Two-part 



Songs for little Singers, on the Kindergarten System. 
The music composed by Lady Baker; edited by G. A. 
Macfarran. 16*. New York. 75 

Froebel (Karl). Elements of Designing on the 
Developing System, for Elementary School Classes, 
and for Families. 4 parts. Leipsic. 

Each, paper, $0.35; cloth 50 

Hailman (W. N.) Kindergarten Culture in the 
Family and Kindergarten. A Complete Sketch of 
Froebel's System of Early Education, adapted to 
American Institutions. For the use of Mothers and 
Teachers. Illustrated. 16**. Cincinnati. 75 

Hoffmann (H.) Kindergarten Toys, and how to 
use Them. A Practical Explanation of the First Six 
Gifts of Froebel's Kindergarten. Illustrated. Paper. 
New York. 20 

Hyde (Anna M.) A Ladder to Learning for Little 
Climbers. Showing how Play and Study may be 
Combined. Prepared for the Use of Kindergartens, 
Infants, Primary, and Parish Schools. 18". Phila- 
delphia. 50 

Kraus-Boelte (Maria) and John Kraus. The 
Kindergarten Guide. An Illustrated Hand-book, de- 
signed for the Self-instruction of Kindergartners, 
Mothers, and Nurses. S**. New York. No. I, 1st 
and 2d Gifts, $0.65; II, 3d-6th, $1.00; HI, 7th 
Gift, 80 

Kriege (A. L.) Rhymes and Tales for the Kin- 
dergarten and Nursery. Collected and revised. 120. 
New York. Paper, $0.50; cloth i 00 

Kriege (Matilda H.) The Child : Its Nature and 
Relations. An Elucidation of Froebel's Principles of 
Education. Second edition. 12". New York, i 00 

Little (Ella). Kindergarten Spelling-book. Part 
first. 160. Boston. 25 



Mann (Mrs. H.) and Peabody (E. O.) Moral 
Culture of Infancy and Kindergarten Guide, with 
music for the Plays. 12®. New York. i 25 

NOA (Henrietta). Plays for the Kindergarten; 
music by C. J. Richter. (The Text of the 19 Plays is 
in both German and English.) 18°. Paper. New 
York. 30 

Payne Qoseph). Froebel and the Kindergarten 
System of Elementary Education. Paper. N. Y. 15 

Peabody (Elizabeth P.) Lectures on the Nursery 
and Kindergartner. No. i. Education of the Kin- 
dergartner. 12*'. Paper. Pittsburg. 25 

Ronge (Johannes and Bertha). A Practical Guide 
to the English Kindergarten, for the use of Mothers, 
Governesses, and Infant Teachers ; being an Exposi- 
tion of Froebel's System of Infant Training, accompa- 
nied with a great variety of Instructive and Amusing 
Games, and Industrial and Gymnastic Exercises. 
With numerous Songs set to Music, and arranged for 
the Exercises. With 71 lithographic plates. New 
York. 2 10 

Wiebe (Ed.) The Paradise of Childhood. A 
Manual for Self-instruction in Friedrich Froebel's Ed- 
ucational Principles, and a Practical Guide to Kinder- 
gartners. With 74 plates of Illustrations. In four 
parts. 4°. Springfield, Mass. Paper, $2.50; cl. 3 00 

See also Works on "Objects." 

NATURAL HISTORY OF THE STATE OF 
NEW YORK. 

This magnificent work was issued by this State at an 
expense "exceeding $500,000, and gave to the world the 
accepted nomenclature of geological formations. Twen- 
ty-two volumes have been issued : the first in 1842, the 
last in 1870. Complete sets are now scarce and valuable, 
but we have for several years purchased all copies offered 
for sale, and have now on hand several complete sets, 
and a great many single volumes. The prices of the 
different volumes vary with their scarcity and condition. 
The Mineralogy we can furnish at $3.00. The Orni* 



Ihology is scarce at $15.00. Complete sets are worth 
from $So.oo to $120.00, according to the condition and 
coloring of the plates. We shall be glad to correspond 
with persons desiring either to buy or to sell. 

Full sets have been furnished to Principal Veeder, of 
Ives Seminary, Antwerp; Principal Dolph, of Port 
Jervis High School; J. Dorman Steele, Ph.D., of El- 
mira, and several others, and we have filled incomplete 
sets in every part of the State. 

SUBJECTS. 

Zoology. — Vol. i. Historical introduction to th 
Series, by Hon. William H. Seward, and Zoology of 
New York, or The New York Fauna. Mammalia. 
Text and 33 full page Plates. By James E. De Kay. 
Issued in 1842. — Vol. 2. Birds (Ornithology). Text 
and 308 Colored Figures. By James E De Kay. 1 844. 
— ^Vol. 3. Reptiles, Fishes and Amphibia. Text. By 
James E. De Kay. 1842. —Vol. 4. Reptiles, Fishes 
and Amphibia. 102 full page Plates. By James E. De 
Kay. 1842. — Vol. 5. Mollusca and Crustacea. Text 
with 53 full page Colored Plates. By James E. De Kay. 
1843 and 1844. 

Botany.— Vol. 6. Flora of the State of New York 
Text and 72 full page Plates. By John Torrey, M.D., 
F.L.S. 1843. —VoL 7. Flora of the State of New 
York, Text and 89 full page Plates. By John Torrey, 
M.D., F.L.S. 1843. 

Mineralogy.— 'Vol. 8. Mineralogy of New York 
(in one vol.) By Lewis C. Beck, M.D., Prof, of Chem- 
istry and Natural History. Profuse Illustrations and 8 
full page Plates. 1842. 

Geology. — Vol. 9. Geology of New York, conipris- 
ing the Geology of Washington, Saratoga, Schene(5^dy, 
Schoharie and Delaware counties, and all territory with- 
in the State south and east of these counties, with 9 fold- 
ed and 37 full page Plates, colored. By WiUiam W. 
Mather, Prof, of Nat. Hist. 1843.— Vol. lo. Second 
Geological District, embracing St. Lawrence, Frankhn., 
Clinton, Essex, Warren, Hamilton and Jefferson coun- 
ties, with 10 folded and 7 full page maps, colored. By 
Ebenezer Emmons, Prof, of Nat. Hist. 1842.— Vot 



II. Third Geological District, embracing Montgom- 
ery, Fulton, Otsego, Herkimer, Oneida, Lewis, Oswe- 
go, Madison, Onondaga, Cayuga, Cortland, Chenango, 
Broome, Tioga and the eastern half of Tompkins coun- 
ties, with many illustrations. By Lardner Vanuxem. 
1842. — Vol. 12. Fourth Geological District, embracing 
Wayne, Monroe, Orleans, Niagara, Seneca, Ontario, 
Yates, Livingston, Genesee, Erie, Chemung, Steuben, 
Allegany, Cattaraugus, Chautauqua and the western part 
of Tompkins counties, with 15 folded Plates, colored, 
and 80 full page Plates. By James Hall. 1843. 

Agriculture. — Vol. 13. Agriculture of New York, 
jlassification, etc., of Soils and Rocks. 8 folded, 13 full 
page Plates, colored. By Ebenezer Emmons, M.D. 
1846. — Vol. 14. Agriculture of New York, analysis of 
Soils, Plants, Cereals, etc. 43 full page Plates, colored. 
By Ebenezer Emmons, M.D. 1849. — Vol. 15. Agri- 
culture of New York, Fruits of the State. Many Illus- 
trations. By Ebenezer Emmons, M.D. 185 1. — Vol. 
16. Agriculture of New York, Fruits (vol. HI on title 
page). 99 full page Colored Plates. By Ebenezer Em- 
mons, M.D. 1851. — Vol. 17. Agriculture of New- 
York, Insects injurious to Agriculture. Over looo Col- 
ored Figures. By Ebenezer Emmons, M.D. 1854. 

Paleontology. — Vol. 18. Palaeontology of New 
York, Organic remains of the Lower Silurian. 97 full 
page and folded Plates. By James Hall. 1847. — Vol. 

19. Organic remains of the Middle Silurian. 98 full 
page and folded Plates. By James Hall. 1853. — Vol. 

20, Organic remains of the Lower Helderberg Group 
and Oriskany Sandstone. By James Hall. 1859. — 
Vol. 21. 150 full page Plates to the same. By James 
Hall. 1862. — Vol. 22. Fossil Brachiopoda of the Upper 
Helderberg, Hamilton, Portage and Chemung Groups, 
etc. 75 full page Plates. By James Hall. Issued 
1870. 

REGENTS' REPORTS ON THE MUSEUM OF 
NATURAL HISTORY. 
These Reports form Annual Supplements to the Nat- 
ural History of the State of New York, and are even 
more rare and in some cases more valuable than the vol' 



umes of Natural History themselves. We have one 
complete set, except the first two volumes, and many 
duplicates, including the Report of the Legislative Com- 
mittee upon the history and cost of the Natural History 
of New York. Prices furnished on application. 

Index to the Reports. 

No. Ill, 1850. Catalogue*; of Quadrupeds, Reptiles 
and Amphibians, Minerals and Fossils, Historical and 
Antiquarian Collection. Reports — on Indian Collection, 
by Lewis H. Morgan, with cuts and beautifully colored full 
page plates ; on ancient Remains of Art in Jefferson and 
St. Lawrence counties, by Franklin B. Hough, with 5 
full page illustrations ; on the Mineralogy of New York, 
by Lewis H. Beck, with cuts. References to various 
Essays and Writings on the Natural History of New 
York. Index to the Volumes in the State Cabinet of 
Natural History. Description of New Species of Fos- 
sils from the Trenton Limestone, by James Hall, with 3 
full page and I folded illustrations. Pp. 183. 

No. IV, 1 85 1. Catalogues of Quadrupeds, Birds, 
Reptiles, Amphibians, Insects, Botanical Specimens, 
Minerals and Fossils, with cuts, Historical Collection. 
Ancient Remains, continued from No. Ill, with cuts 
and 5 full page illustrations, etc. Pp. 146. 

No. V, 1852. The usual annual catalogues of addi- 
tions. Description of the means employed by E. Mer- 
riam to remove the rocks of Hurlgate, etc. Pp. 66. 
Appendix. Report on the Fabrics, Inventions, Im- 
plements and Utensils of the Iroquois, by Lewis H. 
Morgan, with many cuts and 20 full page colored illustra- 
tions. Pp. 66. 

No. VI, 1853. The usual annual catalogues. Pp.35. 

No. VII, 1854. The usual annual catalogues. Com- 
munication from Prof. Geo. H. Cook, on Salt and Salt 
Water. On the Serpents of Nev/ York, by Spencer F. 
Baird, with 2 full page plates. Pp. 127. 

No. VIII, 1855. The usual catalogues, with folded 
plate of Trilobite. Also, catalogue of the Fishes of the 
State, by James E. De Kay. Pp. 69. 

No. IX, 1856. The usual catalogues. Pp. 48. 



No. X, 1857. Addresses delivered at the Inaugura 
tion of the State Geological Hall. The usual catalogues, 
with cuts of Fossils. Pp. 190. 

No. XI, 1858. The usual catalogues. Pp. 44. 

No. XII, 1859. Contributions to the Palceontology 
of New York, 1855-8, by James Hall. The usual cata- 
logues. Pp. III. 

No. XIII, i860. The usual catalogues. Catalogue 
of the Mazatlan Mollusca. Ancient Monuments of 
Western New York, by T. Apoleon Cheney, with map 
and 27 full page plates. Contributions to Palaeontology, 
1858-9, by James Hall. Pp. 128. 

No. XIV, 1 86 1. The usual catalogues. Guide to 
the Geology of New York, by Ledyard Lincklaen, with 
cuts and 19 full page plates. Contributions, 1859-60, 
by James Hall. Pp. 1 10. 

No. XV, 1862. The usual catalogues. Contributions 
as to the Upper Helderberg, Hamilton and Chemung 
Groups, by James Hall, with n full page plates. Pp. 
181. 

No. XVI, 1863. The usual catalogues. Radical 
Words of the Mohawk Language, by Rev. James 
Bruyas, S.J. Pp.123. -^//^-^^//-'^ 2? (separate volume). 
Contributions to Palceontology, 1 86 1-2, by James Hall, 
with cuts and 15 full page illustrations. Pp. 226. 

No. XVII, 1864. The usual catalogues. Prelimi- 
nary List of Plants of Buffalo and its Vicinity, by Geo. 
W. Clinton. Meteorological Observations. Contribu- 
tions to Palceontology, by James Plall. Pp. 60. 

No. XVIII, 1865. The usual catalogues. Descrip- 
tion of the Wadsworth Gallery of Casts of Fossil Ani- 
mals, by Henry A. Ward, with profuse illustrations. 
Catalogue of Plants found in Oneida county and Vicinity, 
by John A. Paine. Catalogue of Mosses, by Charles 
H. Peck. Facts and Observations touching the Flora 
of the State of New York. Meteorological Observations. 
Table of the Variation of the Needle. Pp. 232. Con- 
tributions to Palaeontology, by James Hall, are indexed, 
Dut were printed in the Twentieth Report. 

No. XIX, 1866. Special Report on increasing the 
Cabinet of Natural History. The usual catalogues. 



Catalogue of Mosses and Observations on Flora of the 
State continued. Contributions, by James Hall. Pp. 8o. 

No. XX, 1867, The usual catalogues. Catalogue of 
Books. Local Climatology. Metorological Observa- 
tions. Local Climatology, by Prof. W. D. Wilson. 
Observations on the Atrypa, with cuts. Contributions 
to Palaeontology, by James Hall, including the study of 
Graptolitcs, etc., profusely illustrated, 23 full page illus- 
trations. Pp. 410. 

No. XXI, 1868. The usual catalogues. The Stone 
<ind Bone Implements of the Arickarees, by Lewis H. 
Morgan, with 6 full page plates. The Mineralogy of 
the Laurentian Limestonesof North America, byT. Sterry 
Hunt. Notes and Observations on the Cohoes Masto- 
don, by James Hall, with 7 folded plates. General In- 
dex to Reports I-XX, exclusive of the Geological and 
Paloeontological Papers. Pp. 190. 

No. XXII, 1869. The usual catalogues. Partial list 
of Shells found near Troy, by Truman H. Aldrich. 
Reports on Meteorology and Magnetic Variations. Pp. 

No. XXIII, 1870. The usual catalogues. Report of 
the Botanist, with 6 full page colored illustrations. En- 
tomological Contributions, by J. A. Lintner, with 2 full 
page illustrations. On Cucullia, by A. Speyer, M.D. 
Notes on Brachiopoda, with 6 full page illustrations, and 
Reply to a Note on a Question of Priority, by James 
Hall. Pp. 252. 

No. XXIV, 1871. The usual catalogues. Report of 
the Botanist, with 4 full page colored plates. Entomo- 
logical Contributions, continued. Ascent of Mt. Sew- 
ard, and its Barometrical Measurement, by Verplanck 
Colvin, with one full page illustration. Description of 
Fossils from Louisville, Ky., and Remarks on Peculiar 
Impressions in Sandstone of the Chemung Group, by 
James Hall and R. P. Whitfield. Descriptions of Cri- 
iioidea, and of new Fossils from Cincinnati, by James 
Hall, with 4 full page plates. Pp. 232. 

No. XXV, 1872. The usual catalogues. Report of 
the Botanist, with two full page illustrations. Pp. 123. 

No. XXVI, 1873. The usual catalogues. List of 



Iron Ores in the Economic Collection. Record of Bor« 
mgs of Gardner Oil Well. Report of the Botanist. 
Fossils in the Lower Helderberg Group, by James Hall. 
Entomological Contributions, No. 3, with cuts. Pp. 192. 
No. XXVII, 1874. The usual catalogues. List of 
Land and Fresh Water Shells, by T. H. Aldrich. Re- 

Kort of the Botanist, with 2 full page illustrations. The 
I'iagara and Lower Helderberg Groups, and New Spe- 
cies of Gomatitidae, by James Hall, with 5 full page il- 
lustrations. Entomological Contributions, No. 4. Pp. 
148. 



THE 





in Fnicati 



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3. The School Bulletin Year-Book.— Vol. I., 1878. A complete 
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4. Common School Law fob Common School Teachers.— The stand- 
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7. TheJIegents' Questions, 1866 to 1877.— These are the questions 
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